Correlation Between First Solar and Beam Global

Can any of the company-specific risk be diversified away by investing in both First Solar and Beam Global 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 First Solar and Beam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Solar and Beam Global, you can compare the effects of market volatilities on First Solar and Beam Global 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 First Solar with a short position of Beam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Solar and Beam Global.

Diversification Opportunities for First Solar and Beam Global

0.0

Correlation Coefficient

First Solar  Beam Global

Pay attention - limited upside

The 3 months correlation between First and Beam is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Solar and Beam Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beam Global and First 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 First Solar are associated (or correlated) with Beam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beam Global has no effect on the direction of First Solar i.e., First Solar and Beam Global go up and down completely randomly.

Pair Corralation between First Solar and Beam Global

If you would invest  16,914  in First Solar on January 24, 2024 and sell it today you would earn a total of  1,096  from holding First Solar or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Solar  vs.  Beam Global

First Solar

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Solar are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating essential indicators, First Solar reported solid returns over the last few months and may actually be approaching a breakup point.

Beam Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beam Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Beam Global is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with First Solar and Beam Global

The main advantage of trading using opposite First Solar and Beam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Solar position performs unexpectedly, Beam Global 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 Beam Global will offset losses from the drop in Beam Global's long position.

The idea behind First Solar and Beam Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.