Correlation Between Canadian Solar and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Analog Devices 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 Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and Analog Devices, you can compare the effects of market volatilities on Canadian Solar and Analog Devices 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 Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Analog Devices.
Diversification Opportunities for Canadian Solar and Analog Devices
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Analog is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices 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 Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Canadian Solar i.e., Canadian Solar and Analog Devices go up and down completely randomly.
Pair Corralation between Canadian Solar and Analog Devices
Given the investment horizon of 90 days Canadian Solar is expected to generate 4.49 times less return on investment than Analog Devices. In addition to that, Canadian Solar is 2.89 times more volatile than Analog Devices. It trades about 0.01 of its total potential returns per unit of risk. Analog Devices is currently generating about 0.17 per unit of volatility. If you would invest 21,447 in Analog Devices on May 31, 2025 and sell it today you would earn a total of 3,684 from holding Analog Devices or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Solar vs. Analog Devices
Performance |
| Timeline |
| Canadian Solar |
| Analog Devices |
Canadian Solar and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Solar and Analog Devices
The main advantage of trading using opposite Canadian Solar and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Canadian Solar vs. JinkoSolar Holding | Canadian Solar vs. First Solar | Canadian Solar vs. Complete Solaria, | Canadian Solar vs. SolarEdge Technologies |
| Analog Devices vs. SolarEdge Technologies | Analog Devices vs. First Solar | Analog Devices vs. Sunrun Inc | Analog Devices vs. Canadian Solar |
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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