Correlation Between Intel and FTC Solar

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

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

Diversification Opportunities for Intel and FTC Solar

0.58

Correlation Coefficient

Intel  FTC Solar

Very weak diversification

The 3 months correlation between Intel and FTC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intel and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar and Intel 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 Intel are associated (or correlated) with FTC Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC Solar has no effect on the direction of Intel i.e., Intel and FTC Solar go up and down completely randomly.

Pair Corralation between Intel and FTC Solar

Given the investment horizon of 90 days Intel is expected to generate 64.77 times less return on investment than FTC Solar. But when comparing it to its historical volatility, Intel is 1.52 times less risky than FTC Solar. It trades about 0.01 of its potential returns per unit of risk. FTC Solar is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  313.00  in FTC Solar on May 2, 2025 and sell it today you would earn a total of  267.00  from holding FTC Solar or generate 85.3% return on investment over 90 days.

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

Intel  vs.  FTC Solar

Intel

Risk-Adjusted Performance

Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Intel is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

FTC Solar

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FTC Solar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, FTC Solar demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intel and FTC Solar

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

The idea behind Intel and FTC 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.