Correlation Between Canadian Solar and Global Acquisitions

Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Global Acquisitions 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 Global Acquisitions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canadian Solar and Global Acquisitions, you can compare the effects of market volatilities on Canadian Solar and Global Acquisitions 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 Global Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Global Acquisitions.

Diversification Opportunities for Canadian Solar and Global Acquisitions

0.44

Correlation Coefficient

Canadian Solar  Global Acquisitions

Very weak diversification

The 3 months correlation between Canadian and Global is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Global Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Acquisitions 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 Global Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Acquisitions has no effect on the direction of Canadian Solar i.e., Canadian Solar and Global Acquisitions go up and down completely randomly.

Pair Corralation between Canadian Solar and Global Acquisitions

Given the investment horizon of 90 days Canadian Solar is expected to under-perform the Global Acquisitions. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Solar is 4.7 times less risky than Global Acquisitions. The stock trades about -0.01 of its potential returns per unit of risk. The Global Acquisitions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  24.00  in Global Acquisitions on May 13, 2025 and sell it today you would earn a total of  576.00  from holding Global Acquisitions or generate 2400.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Canadian Solar  vs.  Global Acquisitions

Canadian Solar

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward indicators, Canadian Solar reported solid returns over the last few months and may actually be approaching a breakup point.

Global Acquisitions

Risk-Adjusted Performance

Weakest

Over the last 90 days Global Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Global Acquisitions is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Canadian Solar and Global Acquisitions

The main advantage of trading using opposite Canadian Solar and Global Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Global Acquisitions 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 Global Acquisitions will offset losses from the drop in Global Acquisitions' long position.

The idea behind Canadian Solar and Global Acquisitions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.