Correlation Between Emeren and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both Emeren 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 Emeren and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emeren Group and Canadian Solar, you can compare the effects of market volatilities on Emeren 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 Emeren with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emeren and Canadian Solar.
Diversification Opportunities for Emeren and Canadian Solar
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emeren and Canadian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Emeren Group and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar 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 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 Emeren i.e., Emeren and Canadian Solar go up and down completely randomly.
Pair Corralation between Emeren and Canadian Solar
Considering the 90-day investment horizon Emeren Group is expected to generate 0.82 times more return on investment than Canadian Solar. However, Emeren Group is 1.22 times less risky than Canadian Solar. It trades about 0.22 of its potential returns per unit of risk. Canadian Solar is currently generating about 0.15 per unit of risk. If you would invest 128.00 in Emeren Group on April 26, 2025 and sell it today you would earn a total of 65.00 from holding Emeren Group or generate 50.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Emeren Group vs. Canadian Solar
Performance |
| Timeline |
| Emeren Group |
| Canadian Solar |
Emeren and Canadian Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emeren and Canadian Solar
The main advantage of trading using opposite Emeren and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeren 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.| Emeren vs. JinkoSolar Holding | Emeren vs. Complete Solaria, | Emeren vs. Canadian Solar | Emeren vs. Daqo New Energy |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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