Correlation Between Nextracker and FTC Solar
Can any of the company-specific risk be diversified away by investing in both Nextracker and FTC 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 Nextracker and FTC Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextracker Class A and FTC Solar, you can compare the effects of market volatilities on Nextracker and FTC 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 Nextracker with a short position of FTC Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextracker and FTC Solar.
Diversification Opportunities for Nextracker and FTC Solar
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextracker and FTC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nextracker Class A and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar and Nextracker 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 Nextracker Class A are associated (or correlated) with FTC Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC Solar has no effect on the direction of Nextracker i.e., Nextracker and FTC Solar go up and down completely randomly.
Pair Corralation between Nextracker and FTC Solar
Considering the 90-day investment horizon Nextracker is expected to generate 2.61 times less return on investment than FTC Solar. But when comparing it to its historical volatility, Nextracker Class A is 1.51 times less risky than FTC Solar. It trades about 0.1 of its potential returns per unit of risk. FTC Solar is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 383.00 in FTC Solar on May 27, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextracker Class A vs. FTC Solar
Performance |
| Timeline |
| Nextracker Class A |
| FTC Solar |
Nextracker and FTC Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextracker and FTC Solar
The main advantage of trading using opposite Nextracker and FTC Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextracker position performs unexpectedly, FTC 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 FTC Solar will offset losses from the drop in FTC Solar's long position.| Nextracker vs. Juniata Valley Financial | Nextracker vs. Capital Clean Energy | Nextracker vs. American Clean Resources | Nextracker vs. Aozora Bank Ltd |
| FTC Solar vs. Maxeon Solar Technologies | FTC Solar vs. Nextracker Class A | FTC Solar vs. Shoals Technologies Group | FTC Solar vs. Array Technologies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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