Correlation Between Spruce Power and First Solar
Can any of the company-specific risk be diversified away by investing in both Spruce Power 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 Spruce Power and First Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spruce Power Holding and First Solar, you can compare the effects of market volatilities on Spruce Power 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 Spruce Power with a short position of First Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spruce Power and First Solar.
Diversification Opportunities for Spruce Power and First Solar
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spruce and First is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Spruce Power Holding and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Spruce Power 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 Spruce Power Holding 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 Spruce Power i.e., Spruce Power and First Solar go up and down completely randomly.
Pair Corralation between Spruce Power and First Solar
Given the investment horizon of 90 days Spruce Power Holding is expected to under-perform the First Solar. In addition to that, Spruce Power is 1.3 times more volatile than First Solar. It trades about -0.03 of its total potential returns per unit of risk. First Solar is currently generating about 0.12 per unit of volatility. If you would invest 16,016 in First Solar on June 7, 2025 and sell it today you would earn a total of 4,492 from holding First Solar or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Spruce Power Holding vs. First Solar
Performance |
| Timeline |
| Spruce Power Holding |
| First Solar |
Spruce Power and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spruce Power and First Solar
The main advantage of trading using opposite Spruce Power and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spruce Power 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.| Spruce Power vs. Emeren Group | Spruce Power vs. Nextracker Class A | Spruce Power vs. Ouster, Common Stock | Spruce Power vs. Xos Inc |
| First Solar vs. SolarEdge Technologies | First Solar vs. Enphase Energy | First Solar vs. Canadian Solar | First Solar vs. Sunrun Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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