Correlation Between First Solar and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both First Solar and Cheniere Energy 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 First Solar and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Solar and Cheniere Energy Partners, you can compare the effects of market volatilities on First Solar and Cheniere Energy 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 First Solar with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Solar and Cheniere Energy.
Diversification Opportunities for First Solar and Cheniere Energy
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Cheniere is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding First Solar and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and First Solar 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 First Solar are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of First Solar i.e., First Solar and Cheniere Energy go up and down completely randomly.
Pair Corralation between First Solar and Cheniere Energy
Given the investment horizon of 90 days First Solar is expected to generate 1.97 times more return on investment than Cheniere Energy. However, First Solar is 1.97 times more volatile than Cheniere Energy Partners. It trades about 0.19 of its potential returns per unit of risk. Cheniere Energy Partners is currently generating about -0.01 per unit of risk. If you would invest 19,519 in First Solar on August 29, 2025 and sell it today you would earn a total of 7,702 from holding First Solar or generate 39.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Solar vs. Cheniere Energy Partners
Performance |
| Timeline |
| First Solar |
| Cheniere Energy Partners |
First Solar and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Solar and Cheniere Energy
The main advantage of trading using opposite First Solar and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Solar position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| First Solar vs. Geely Automobile Holdings | First Solar vs. Cardinal Health | First Solar vs. Eternal Hospitality Group | First Solar vs. National Healthcare Logistics |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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