Correlation Between Sunworks and First Solar

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

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

Diversification Opportunities for Sunworks and First Solar

0.0

Correlation Coefficient

Sunworks  First Solar

Pay attention - limited upside

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

Pair Corralation between Sunworks and First Solar

If you would invest (100.00) in Sunworks on December 5, 2024 and sell it today you would earn a total of  100.00  from holding Sunworks or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sunworks  vs.  First Solar

Sunworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunworks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunworks is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Solar

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sunworks and First Solar

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

The idea behind Sunworks and First 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.