Correlation Between Canadian Solar and Pixelworks
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Pixelworks 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 Pixelworks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and Pixelworks, you can compare the effects of market volatilities on Canadian Solar and Pixelworks 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 Pixelworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Pixelworks.
Diversification Opportunities for Canadian Solar and Pixelworks
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Pixelworks is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Pixelworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pixelworks 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 Pixelworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pixelworks has no effect on the direction of Canadian Solar i.e., Canadian Solar and Pixelworks go up and down completely randomly.
Pair Corralation between Canadian Solar and Pixelworks
Given the investment horizon of 90 days Canadian Solar is expected to under-perform the Pixelworks. In addition to that, Canadian Solar is 1.18 times more volatile than Pixelworks. It trades about -0.04 of its total potential returns per unit of risk. Pixelworks is currently generating about -0.03 per unit of volatility. If you would invest 104.00 in Pixelworks on August 30, 2024 and sell it today you would lose (28.00) from holding Pixelworks or give up 26.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Solar vs. Pixelworks
Performance |
| Timeline |
| Canadian Solar |
| Pixelworks |
Canadian Solar and Pixelworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Solar and Pixelworks
The main advantage of trading using opposite Canadian Solar and Pixelworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Pixelworks 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 Pixelworks will offset losses from the drop in Pixelworks' long position.| Canadian Solar vs. Maxeon Solar Technologies | Canadian Solar vs. SolarEdge Technologies | Canadian Solar vs. Sunnova Energy International | Canadian Solar vs. Enphase Energy |
| Pixelworks vs. First Solar | Pixelworks vs. Sunrun Inc | Pixelworks vs. Canadian Solar | Pixelworks vs. SolarEdge Technologies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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