Correlation Between Shoals Technologies and Ascent Solar

Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Ascent Solar at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shoals Technologies and Ascent Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shoals Technologies Group and Ascent Solar Technologies,, you can compare the effects of market volatilities on Shoals Technologies and Ascent Solar and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shoals Technologies with a short position of Ascent Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Ascent Solar.

Diversification Opportunities for Shoals Technologies and Ascent Solar

0.44

Correlation Coefficient

Shoals Technologies  Ascent Solar

Very weak diversification

The 3 months correlation between Shoals and Ascent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Ascent Solar Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascent Solar Technol and Shoals Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shoals Technologies Group are associated (or correlated) with Ascent Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascent Solar Technol has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Ascent Solar go up and down completely randomly.

Pair Corralation between Shoals Technologies and Ascent Solar

Given the investment horizon of 90 days Shoals Technologies is expected to generate 4.09 times less return on investment than Ascent Solar. But when comparing it to its historical volatility, Shoals Technologies Group is 1.33 times less risky than Ascent Solar. It trades about 0.01 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  291.00  in Ascent Solar Technologies, on October 20, 2024 and sell it today you would lose (26.00) from holding Ascent Solar Technologies, or give up 8.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Shoals Technologies Group  vs.  Ascent Solar Technologies,

Shoals Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shoals Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Shoals Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ascent Solar Technol

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ascent Solar Technologies, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Ascent Solar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Shoals Technologies and Ascent Solar

The main advantage of trading using opposite Shoals Technologies and Ascent Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Ascent Solar can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ascent Solar will offset losses from the drop in Ascent Solar's long position.

The idea behind Shoals Technologies Group and Ascent Solar Technologies, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..