Correlation Between Canadian Solar and Arrival

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

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

Diversification Opportunities for Canadian Solar and Arrival

0.12

Correlation Coefficient

Canadian Solar  Arrival

Average diversification

The 3 months correlation between Canadian and Arrival is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Arrival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrival 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 Arrival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrival has no effect on the direction of Canadian Solar i.e., Canadian Solar and Arrival go up and down completely randomly.

Pair Corralation between Canadian Solar and Arrival

Given the investment horizon of 90 days Canadian Solar is expected to generate 28.27 times less return on investment than Arrival. But when comparing it to its historical volatility, Canadian Solar is 11.48 times less risky than Arrival. It trades about 0.07 of its potential returns per unit of risk. Arrival is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Arrival on July 7, 2025 and sell it today you would lose (0.01) from holding Arrival or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Canadian Solar  vs.  Arrival

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.

Arrival

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arrival are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, Arrival reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian Solar and Arrival

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

The idea behind Canadian Solar and Arrival 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 Commodity Directory module to find actively traded commodities issued by global exchanges.