Correlation Between Canadian Solar and Kulicke
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Kulicke 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 Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and Kulicke and Soffa, you can compare the effects of market volatilities on Canadian Solar and Kulicke 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 Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Kulicke.
Diversification Opportunities for Canadian Solar and Kulicke
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canadian and Kulicke is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Canadian Solar i.e., Canadian Solar and Kulicke go up and down completely randomly.
Pair Corralation between Canadian Solar and Kulicke
Given the investment horizon of 90 days Canadian Solar is expected to under-perform the Kulicke. In addition to that, Canadian Solar is 1.72 times more volatile than Kulicke and Soffa. It trades about -0.23 of its total potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.15 per unit of volatility. If you would invest 4,703 in Kulicke and Soffa on November 3, 2024 and sell it today you would lose (268.00) from holding Kulicke and Soffa or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Solar vs. Kulicke and Soffa
Performance |
| Timeline |
| Canadian Solar |
| Kulicke and Soffa |
Canadian Solar and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Solar and Kulicke
The main advantage of trading using opposite Canadian Solar and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Kulicke 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 Kulicke will offset losses from the drop in Kulicke'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 |
| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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