Correlation Between Plains All and First Solar
Can any of the company-specific risk be diversified away by investing in both Plains All 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 Plains All and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plains All American and First Solar, you can compare the effects of market volatilities on Plains All 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 Plains All with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plains All and First Solar.
Diversification Opportunities for Plains All and First Solar
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plains and First is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Plains All American and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Plains All 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 Plains All American 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 Plains All i.e., Plains All and First Solar go up and down completely randomly.
Pair Corralation between Plains All and First Solar
Considering the 90-day investment horizon Plains All American is expected to under-perform the First Solar. But the stock apears to be less risky and, when comparing its historical volatility, Plains All American is 2.66 times less risky than First Solar. The stock trades about -0.02 of its potential returns per unit of risk. The First Solar is currently generating about 0.19 of returns per unit of risk over similar time horizon. 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 |
Plains All American vs. First Solar
Performance |
| Timeline |
| Plains All American |
| First Solar |
Plains All and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plains All and First Solar
The main advantage of trading using opposite Plains All and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plains All 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.| Plains All vs. Tyson Foods | Plains All vs. Astral Foods Limited | Plains All vs. Rexford Industrial Realty | Plains All vs. Eagle Mountain Mining |
| First Solar vs. Geely Automobile Holdings | First Solar vs. Cardinal Health | First Solar vs. Eternal Hospitality Group | First Solar vs. National Healthcare Logistics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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