Correlation Between FTC Solar and Shoals Technologies
Can any of the company-specific risk be diversified away by investing in both FTC Solar 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 FTC Solar and Shoals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and Shoals Technologies Group, you can compare the effects of market volatilities on FTC Solar 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 FTC Solar with a short position of Shoals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and Shoals Technologies.
Diversification Opportunities for FTC Solar and Shoals Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FTC and Shoals is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and Shoals Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoals Technologies and FTC 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 FTC Solar 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 FTC Solar i.e., FTC Solar and Shoals Technologies go up and down completely randomly.
Pair Corralation between FTC Solar and Shoals Technologies
Given the investment horizon of 90 days FTC Solar is expected to generate 0.91 times more return on investment than Shoals Technologies. However, FTC Solar is 1.1 times less risky than Shoals Technologies. It trades about 0.18 of its potential returns per unit of risk. Shoals Technologies Group is currently generating about 0.11 per unit of risk. If you would invest 383.00 in FTC Solar on May 26, 2025 and sell it today you would earn a total of 262.00 from holding FTC Solar or generate 68.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTC Solar vs. Shoals Technologies Group
Performance |
| Timeline |
| FTC Solar |
| Shoals Technologies |
FTC Solar and Shoals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and Shoals Technologies
The main advantage of trading using opposite FTC Solar and Shoals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar 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.| FTC Solar vs. Maxeon Solar Technologies | FTC Solar vs. Nextracker Class A | FTC Solar vs. Shoals Technologies Group | FTC Solar vs. Array Technologies |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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