Correlation Between Shoals Technologies and Agrify Corp

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

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

Diversification Opportunities for Shoals Technologies and Agrify Corp

0.44

Correlation Coefficient

Shoals Technologies  Agrify Corp

Very weak diversification

The 3 months correlation between Shoals and Agrify is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Shoals 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 Shoals Technologies Group are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Agrify Corp go up and down completely randomly.

Pair Corralation between Shoals Technologies and Agrify Corp

Given the investment horizon of 90 days Shoals Technologies Group is expected to generate 0.92 times more return on investment than Agrify Corp. However, Shoals Technologies Group is 1.09 times less risky than Agrify Corp. It trades about 0.11 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.06 per unit of risk. If you would invest  376.00  in Shoals Technologies Group on May 5, 2025 and sell it today you would earn a total of  140.00  from holding Shoals Technologies Group or generate 37.23% return on investment over 90 days.

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

Shoals Technologies Group  vs.  Agrify Corp

Shoals Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shoals Technologies Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Shoals Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Agrify Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agrify Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Agrify Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shoals Technologies and Agrify Corp

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

The idea behind Shoals Technologies Group and Agrify Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.