Correlation Between FTC Solar and Emeren
Can any of the company-specific risk be diversified away by investing in both FTC Solar and Emeren 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 Emeren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTC Solar and Emeren Group, you can compare the effects of market volatilities on FTC Solar and Emeren 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 Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTC Solar and Emeren.
Diversification Opportunities for FTC Solar and Emeren
Poor diversification
The 3 months correlation between FTC and Emeren is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FTC Solar and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of FTC Solar i.e., FTC Solar and Emeren go up and down completely randomly.
Pair Corralation between FTC Solar and Emeren
Given the investment horizon of 90 days FTC Solar is expected to generate 2.03 times more return on investment than Emeren. However, FTC Solar is 2.03 times more volatile than Emeren Group. It trades about 0.18 of its potential returns per unit of risk. Emeren Group is currently generating about 0.08 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. Emeren Group
Performance |
| Timeline |
| FTC Solar |
| Emeren Group |
FTC Solar and Emeren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTC Solar and Emeren
The main advantage of trading using opposite FTC Solar and Emeren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTC Solar position performs unexpectedly, Emeren 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 Emeren will offset losses from the drop in Emeren's 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 |
| Emeren vs. JinkoSolar Holding | Emeren vs. Complete Solaria, | Emeren vs. Canadian Solar | Emeren vs. Daqo New Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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