Correlation Between Canadian Solar and Atlas Engineered

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

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

Diversification Opportunities for Canadian Solar and Atlas Engineered

0.7

Correlation Coefficient

Canadian Solar  Atlas Engineered

Poor diversification

The 3 months correlation between Canadian and Atlas is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Atlas Engineered Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Engineered Products 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 Atlas Engineered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Engineered Products has no effect on the direction of Canadian Solar i.e., Canadian Solar and Atlas Engineered go up and down completely randomly.

Pair Corralation between Canadian Solar and Atlas Engineered

Given the investment horizon of 90 days Canadian Solar is expected to generate 1.79 times more return on investment than Atlas Engineered. However, Canadian Solar is 1.79 times more volatile than Atlas Engineered Products. It trades about 0.08 of its potential returns per unit of risk. Atlas Engineered Products is currently generating about -0.04 per unit of risk. If you would invest  1,104  in Canadian Solar on June 29, 2025 and sell it today you would earn a total of  191.00  from holding Canadian Solar or generate 17.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Canadian Solar  vs.  Atlas Engineered Products

Canadian Solar

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 5 (%) 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.

Atlas Engineered Products

Risk-Adjusted Performance

Weakest

Over the last 90 days Atlas Engineered Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Canadian Solar and Atlas Engineered

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

The idea behind Canadian Solar and Atlas Engineered Products 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.