Correlation Between Exelixis and First Solar

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

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

Diversification Opportunities for Exelixis and First Solar

0.43

Correlation Coefficient

Exelixis  First Solar

Very weak diversification

The 3 months correlation between Exelixis and First is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Exelixis and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar and Exelixis 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 Exelixis 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 Exelixis i.e., Exelixis and First Solar go up and down completely randomly.

Pair Corralation between Exelixis and First Solar

Given the investment horizon of 90 days Exelixis is expected to under-perform the First Solar. But the stock apears to be less risky and, when comparing its historical volatility, Exelixis is 1.24 times less risky than First Solar. The stock trades about -0.01 of its potential returns per unit of risk. The First Solar is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  12,716  in First Solar on May 5, 2025 and sell it today you would earn a total of  5,681  from holding First Solar or generate 44.68% return on investment over 90 days.

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

Exelixis  vs.  First Solar

Exelixis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exelixis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Exelixis is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

First Solar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Solar are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile essential indicators, First Solar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exelixis and First Solar

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

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.