Correlation Between Monolithic Power and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both Monolithic Power 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 Monolithic Power and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monolithic Power Systems and Canadian Solar, you can compare the effects of market volatilities on Monolithic Power 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 Monolithic Power with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monolithic Power and Canadian Solar.
Diversification Opportunities for Monolithic Power and Canadian Solar
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monolithic and Canadian is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Monolithic Power Systems and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and Monolithic Power 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 Monolithic Power Systems 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 Monolithic Power i.e., Monolithic Power and Canadian Solar go up and down completely randomly.
Pair Corralation between Monolithic Power and Canadian Solar
Given the investment horizon of 90 days Monolithic Power Systems is expected to generate 0.58 times more return on investment than Canadian Solar. However, Monolithic Power Systems is 1.71 times less risky than Canadian Solar. It trades about 0.2 of its potential returns per unit of risk. Canadian Solar is currently generating about -0.14 per unit of risk. If you would invest 73,054 in Monolithic Power Systems on May 31, 2025 and sell it today you would earn a total of 11,048 from holding Monolithic Power Systems or generate 15.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Monolithic Power Systems vs. Canadian Solar
Performance |
| Timeline |
| Monolithic Power Systems |
| Canadian Solar |
Monolithic Power and Canadian Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monolithic Power and Canadian Solar
The main advantage of trading using opposite Monolithic Power and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monolithic Power 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.| Monolithic Power vs. SolarEdge Technologies | Monolithic Power vs. First Solar | Monolithic Power vs. Sunrun Inc | Monolithic Power vs. Canadian Solar |
| Canadian Solar vs. JinkoSolar Holding | Canadian Solar vs. First Solar | Canadian Solar vs. Complete Solaria, | Canadian Solar vs. SolarEdge Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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