The Surprising Connection Between Solar Stocks and Oil [Guggenheim Solar ETF(NYSEARCA:TAN)]

solarThe impact of the drop in oil prices can be seen across the market. But there’s one affected area that surprises investors the most: solar stocks. This week’s chart compares U.S. crude futures to the Guggenheim Solar ETF(NYSEARCA:TAN) over the past three months.

Since hitting $107 per barrel in June, oil prices have fallen dramatically. Since September – when the selling really gained steam – crude has dipped by 25%.

During that same period, the Guggenheim Solar ETF also dropped by nearly 25%.

So what does the price of oil have to do with the future demand of solar energy?

Seemingly, nothing.

But many analysts believe that investors have a hard time separating oil from its blanket energy sector. After all, they argue, low oil prices mean that people are less inclined to look at energy alternatives like plug-in cars… or solar panels for their roofs.

Therefore when oil prices dip, the entire energy sector (specifically

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