Correlation Between Solar Integrated and Three Sixty

Can any of the company-specific risk be diversified away by investing in both Solar Integrated and Three Sixty 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 Solar Integrated and Three Sixty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Solar Integrated Roofing and Three Sixty Solar, you can compare the effects of market volatilities on Solar Integrated and Three Sixty 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 Solar Integrated with a short position of Three Sixty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Integrated and Three Sixty.

Diversification Opportunities for Solar Integrated and Three Sixty

0.0

Correlation Coefficient

Solar Integrated  Three Sixty

Pay attention - limited upside

The 3 months correlation between Solar and Three is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Solar Integrated Roofing and Three Sixty Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Three Sixty Solar and Solar Integrated 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 Solar Integrated Roofing are associated (or correlated) with Three Sixty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Three Sixty Solar has no effect on the direction of Solar Integrated i.e., Solar Integrated and Three Sixty go up and down completely randomly.

Pair Corralation between Solar Integrated and Three Sixty

Given the investment horizon of 90 days Solar Integrated Roofing is expected to generate 1.4 times more return on investment than Three Sixty. However, Solar Integrated is 1.4 times more volatile than Three Sixty Solar. It trades about 0.15 of its potential returns per unit of risk. Three Sixty Solar is currently generating about 0.12 per unit of risk. If you would invest  0.01  in Solar Integrated Roofing on December 27, 2024 and sell it today you would lose (0.01) from holding Solar Integrated Roofing or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Solar Integrated Roofing  vs.  Three Sixty Solar

Solar Integrated Roofing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solar Integrated Roofing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Solar Integrated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Three Sixty Solar

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Three Sixty Solar are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Three Sixty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Solar Integrated and Three Sixty

The main advantage of trading using opposite Solar Integrated and Three Sixty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Integrated position performs unexpectedly, Three Sixty 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 Three Sixty will offset losses from the drop in Three Sixty's long position.

The idea behind Solar Integrated Roofing and Three Sixty Solar 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.