Correlation Between Array Technologies and First Solar

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

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

Diversification Opportunities for Array Technologies and First Solar

-0.05

Correlation Coefficient

Array Technologies  First Solar

Good diversification

The 3 months correlation between Array and First is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Array Technologies and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Array Technologies 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 Array Technologies 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 Array Technologies i.e., Array Technologies and First Solar go up and down completely randomly.

Pair Corralation between Array Technologies and First Solar

Given the investment horizon of 90 days Array Technologies is expected to under-perform the First Solar. In addition to that, Array Technologies is 1.18 times more volatile than First Solar. It trades about -0.06 of its total potential returns per unit of risk. First Solar is currently generating about 0.03 per unit of volatility. If you would invest  17,846  in First Solar on May 16, 2025 and sell it today you would earn a total of  638.00  from holding First Solar or generate 3.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Array Technologies  vs.  First Solar

Array Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days Array Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

First Solar

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Solar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile essential indicators, First Solar may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Array Technologies and First Solar

The main advantage of trading using opposite Array Technologies and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Array Technologies 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.

The idea behind Array Technologies and First Solar 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.