Correlation Between Air Lease and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Canadian Solar, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Canadian Solar.
Diversification Opportunities for Air Lease and Canadian Solar
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Canadian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Canadian Solar go up and down completely randomly.
Pair Corralation between Air Lease and Canadian Solar
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.41 times less return on investment than Canadian Solar. But when comparing it to its historical volatility, Air Lease is 2.5 times less risky than Canadian Solar. It trades about 0.18 of its potential returns per unit of risk. Canadian Solar is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 845.00 in Canadian Solar on April 3, 2025 and sell it today you would earn a total of 274.00 from holding Canadian Solar or generate 32.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Canadian Solar
Performance |
| Timeline |
| Air Lease |
| Canadian Solar |
Air Lease and Canadian Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Canadian Solar
The main advantage of trading using opposite Air Lease and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.| Air Lease vs. Lithium Americas Corp | Air Lease vs. Planet Fitness | Air Lease vs. United Parks Resorts | Air Lease vs. JD Sports Fashion |
| Canadian Solar vs. Philip Morris International | Canadian Solar vs. Willscot Mobile Mini | Canadian Solar vs. Westrock Coffee | Canadian Solar vs. PROG Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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