Correlation Between ISun and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both ISun and Canadian Solar 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 ISun and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISun Inc and Canadian Solar, you can compare the effects of market volatilities on ISun and Canadian Solar 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 ISun with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISun and Canadian Solar.
Diversification Opportunities for ISun and Canadian Solar
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ISun and Canadian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ISun Inc and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and ISun 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 ISun Inc are associated (or correlated) with Canadian Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Solar has no effect on the direction of ISun i.e., ISun and Canadian Solar go up and down completely randomly.
Pair Corralation between ISun and Canadian Solar
Given the investment horizon of 90 days ISun Inc is expected to under-perform the Canadian Solar. In addition to that, ISun is 3.5 times more volatile than Canadian Solar. It trades about -0.87 of its total potential returns per unit of risk. Canadian Solar is currently generating about -0.04 per unit of volatility. If you would invest 1,987 in Canadian Solar on August 30, 2024 and sell it today you would lose (711.00) from holding Canadian Solar or give up 35.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 3.17% |
| Values | Daily Returns |
ISun Inc vs. Canadian Solar
Performance |
| Timeline |
| ISun Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Canadian Solar |
ISun and Canadian Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISun and Canadian Solar
The main advantage of trading using opposite ISun and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISun position performs unexpectedly, Canadian Solar 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 Canadian Solar will offset losses from the drop in Canadian Solar's long position.| ISun vs. Polar Power | ISun vs. VivoPower International PLC | ISun vs. Pioneer Power Solutions | ISun vs. Beam Global |
| Canadian Solar vs. Maxeon Solar Technologies | Canadian Solar vs. SolarEdge Technologies | Canadian Solar vs. Sunnova Energy International | Canadian Solar vs. Enphase Energy |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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