Correlation Between Array Technologies and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both Array Technologies and Shoals Technologies 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 Array Technologies and Shoals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Array Technologies and Shoals Technologies Group, you can compare the effects of market volatilities on Array Technologies and Shoals Technologies 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 Array Technologies with a short position of Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Array Technologies and Shoals Technologies.
Diversification Opportunities for Array Technologies and Shoals Technologies
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Array and Shoals is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Array Technologies and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies and Array 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 Array Technologies are associated (or correlated) with Shoals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoals Technologies has no effect on the direction of Array Technologies i.e., Array Technologies and Shoals Technologies go up and down completely randomly.
Pair Corralation between Array Technologies and Shoals Technologies
Given the investment horizon of 90 days Array Technologies is expected to generate 1.11 times less return on investment than Shoals Technologies. But when comparing it to its historical volatility, Array Technologies is 1.02 times less risky than Shoals Technologies. It trades about 0.12 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 456.00 in Shoals Technologies Group on May 31, 2025 and sell it today you would earn a total of 203.00 from holding Shoals Technologies Group or generate 44.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Array Technologies vs. Shoals Technologies Group
Performance |
| Timeline |
| Array Technologies |
| Shoals Technologies |
Array Technologies and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Array Technologies and Shoals Technologies
The main advantage of trading using opposite Array Technologies and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Array Technologies position performs unexpectedly, Shoals Technologies 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 Shoals Technologies will offset losses from the drop in Shoals Technologies' long position.| Array Technologies vs. First Solar | Array Technologies vs. Shoals Technologies Group | Array Technologies vs. Nextracker Class A | Array Technologies vs. Sunrun Inc |
| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Nextracker Class A | Shoals Technologies vs. Maxeon Solar Technologies | Shoals Technologies vs. FTC Solar |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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