Correlation Between NYSE Composite and First Solar
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and First 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 NYSE Composite and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and First Solar, you can compare the effects of market volatilities on NYSE Composite and First 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 NYSE Composite with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and First Solar.
Diversification Opportunities for NYSE Composite and First Solar
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and First is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and NYSE Composite 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 NYSE Composite are associated (or correlated) with First Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of NYSE Composite i.e., NYSE Composite and First Solar go up and down completely randomly.
Pair Corralation between NYSE Composite and First Solar
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.6 times less return on investment than First Solar. But when comparing it to its historical volatility, NYSE Composite is 4.81 times less risky than First Solar. It trades about 0.11 of its potential returns per unit of risk. First Solar is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 17,833 in First Solar on July 20, 2025 and sell it today you would earn a total of 5,352 from holding First Solar or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. First Solar
Performance |
| Timeline |
NYSE Composite and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
First Solar
Pair trading matchups for First Solar
Pair Trading with NYSE Composite and First Solar
The main advantage of trading using opposite NYSE Composite and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, First 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 First Solar will offset losses from the drop in First Solar's long position.| NYSE Composite vs. Reborn Coffee | NYSE Composite vs. Curtiss Motorcycles | NYSE Composite vs. CarsalesCom Ltd ADR | NYSE Composite vs. Grupo Carso SAB |
| First Solar vs. Pembina Pipeline Corp | First Solar vs. Cheniere Energy Partners | First Solar vs. Venture Global, | First Solar vs. Nextracker Class A |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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