Correlation Between Canadian Solar and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Arm Holdings 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 Canadian Solar and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and Arm Holdings plc, you can compare the effects of market volatilities on Canadian Solar and Arm Holdings 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 Canadian Solar with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Arm Holdings.
Diversification Opportunities for Canadian Solar and Arm Holdings
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Arm is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and Canadian Solar 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 Canadian Solar are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Canadian Solar i.e., Canadian Solar and Arm Holdings go up and down completely randomly.
Pair Corralation between Canadian Solar and Arm Holdings
Given the investment horizon of 90 days Canadian Solar is expected to generate 0.96 times more return on investment than Arm Holdings. However, Canadian Solar is 1.04 times less risky than Arm Holdings. It trades about 0.15 of its potential returns per unit of risk. Arm Holdings plc is currently generating about -0.05 per unit of risk. If you would invest 1,070 in Canadian Solar on November 28, 2024 and sell it today you would earn a total of 104.00 from holding Canadian Solar or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Solar vs. Arm Holdings plc
Performance |
| Timeline |
| Canadian Solar |
| Arm Holdings plc |
Canadian Solar and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Solar and Arm Holdings
The main advantage of trading using opposite Canadian Solar and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Canadian Solar vs. Maxeon Solar Technologies | Canadian Solar vs. SolarEdge Technologies | Canadian Solar vs. Sunnova Energy International | Canadian Solar vs. Enphase Energy |
| Arm Holdings vs. Mesa Air Group | Arm Holdings vs. SkyWest | Arm Holdings vs. Church Dwight | Arm Holdings vs. Eastern Co |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |