Correlation Between Wisekey International and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both Wisekey International 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 Wisekey International and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisekey International Holding and Canadian Solar, you can compare the effects of market volatilities on Wisekey International 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 Wisekey International with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and Canadian Solar.
Diversification Opportunities for Wisekey International and Canadian Solar
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wisekey and Canadian is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and Wisekey International 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 Wisekey International Holding 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 Wisekey International i.e., Wisekey International and Canadian Solar go up and down completely randomly.
Pair Corralation between Wisekey International and Canadian Solar
Given the investment horizon of 90 days Wisekey International Holding is expected to generate 7.42 times more return on investment than Canadian Solar. However, Wisekey International is 7.42 times more volatile than Canadian Solar. It trades about 0.33 of its potential returns per unit of risk. Canadian Solar is currently generating about 0.07 per unit of risk. If you would invest 197.00 in Wisekey International Holding on September 19, 2024 and sell it today you would earn a total of 748.00 from holding Wisekey International Holding or generate 379.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wisekey International Holding vs. Canadian Solar
Performance |
| Timeline |
| Wisekey International |
| Canadian Solar |
Wisekey International and Canadian Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisekey International and Canadian Solar
The main advantage of trading using opposite Wisekey International and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International 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.| Wisekey International vs. OppFi Inc | Wisekey International vs. CS Disco LLC | Wisekey International vs. ON24 Inc | Wisekey International vs. Amplitude |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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