Correlation Between Canadian Solar and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and GCT Semiconductor 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 GCT Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and GCT Semiconductor Holding, you can compare the effects of market volatilities on Canadian Solar and GCT Semiconductor 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 GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and GCT Semiconductor.
Diversification Opportunities for Canadian Solar and GCT Semiconductor
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and GCT is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding 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 GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of Canadian Solar i.e., Canadian Solar and GCT Semiconductor go up and down completely randomly.
Pair Corralation between Canadian Solar and GCT Semiconductor
Given the investment horizon of 90 days Canadian Solar is expected to generate 0.67 times more return on investment than GCT Semiconductor. However, Canadian Solar is 1.49 times less risky than GCT Semiconductor. It trades about 0.07 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about -0.14 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 37.00 from holding Canadian Solar or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Solar vs. GCT Semiconductor Holding
Performance |
| Timeline |
| Canadian Solar |
| GCT Semiconductor Holding |
Canadian Solar and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Solar and GCT Semiconductor
The main advantage of trading using opposite Canadian Solar and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| Canadian Solar vs. Maxeon Solar Technologies | Canadian Solar vs. SolarEdge Technologies | Canadian Solar vs. Sunnova Energy International | Canadian Solar vs. Enphase Energy |
| GCT Semiconductor vs. 23Andme Holding Co | GCT Semiconductor vs. Merit Medical Systems | GCT Semiconductor vs. FS KKR Capital | GCT Semiconductor vs. National Waste Management |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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