Correlation Between Emeren and Channel Well
Can any of the company-specific risk be diversified away by investing in both Emeren and Channel Well 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 Emeren and Channel Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emeren Group and Channel Well Technology, you can compare the effects of market volatilities on Emeren and Channel Well 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 Emeren with a short position of Channel Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emeren and Channel Well.
Diversification Opportunities for Emeren and Channel Well
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emeren and Channel is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Emeren Group and Channel Well Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Channel Well Technology and Emeren 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 Emeren Group are associated (or correlated) with Channel Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Channel Well Technology has no effect on the direction of Emeren i.e., Emeren and Channel Well go up and down completely randomly.
Pair Corralation between Emeren and Channel Well
Considering the 90-day investment horizon Emeren Group is expected to under-perform the Channel Well. In addition to that, Emeren is 2.17 times more volatile than Channel Well Technology. It trades about -0.31 of its total potential returns per unit of risk. Channel Well Technology is currently generating about -0.08 per unit of volatility. If you would invest 8,760 in Channel Well Technology on December 15, 2024 and sell it today you would lose (350.00) from holding Channel Well Technology or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emeren Group vs. Channel Well Technology
Performance |
| Timeline |
| Emeren Group |
| Channel Well Technology |
Emeren and Channel Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emeren and Channel Well
The main advantage of trading using opposite Emeren and Channel Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeren position performs unexpectedly, Channel Well 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 Channel Well will offset losses from the drop in Channel Well's long position.| Emeren vs. Canadian Solar | ||
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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