Correlation Between Emeren and Ascent Solar

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

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

Diversification Opportunities for Emeren and Ascent Solar

0.69

Correlation Coefficient

Emeren  Ascent Solar

Poor diversification

The 3 months correlation between Emeren and Ascent is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Emeren 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 Emeren 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 Emeren 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 Emeren i.e., Emeren and Ascent Solar go up and down completely randomly.

Pair Corralation between Emeren and Ascent Solar

Considering the 90-day investment horizon Emeren Group is expected to generate 0.46 times more return on investment than Ascent Solar. However, Emeren Group is 2.2 times less risky than Ascent Solar. It trades about -0.08 of its potential returns per unit of risk. Ascent Solar Technologies, is currently generating about -0.05 per unit of risk. If you would invest  187.00  in Emeren Group on December 4, 2024 and sell it today you would lose (35.00) from holding Emeren Group or give up 18.72% of portfolio value over 90 days.

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

Emeren Group  vs.  Ascent Solar Technologies,

Emeren Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emeren Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ascent Solar Technol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ascent Solar Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Emeren and Ascent Solar

The main advantage of trading using opposite Emeren and Ascent Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeren 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 Emeren 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.