Correlation Between Canadian Solar and Conifex Timber

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

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

Diversification Opportunities for Canadian Solar and Conifex Timber

-0.37

Correlation Coefficient

Canadian Solar  Conifex Timber

Very good diversification

The 3 months correlation between Canadian and Conifex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber 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 Conifex Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifex Timber has no effect on the direction of Canadian Solar i.e., Canadian Solar and Conifex Timber go up and down completely randomly.

Pair Corralation between Canadian Solar and Conifex Timber

Given the investment horizon of 90 days Canadian Solar is expected to generate 1.01 times more return on investment than Conifex Timber. However, Canadian Solar is 1.01 times more volatile than Conifex Timber. It trades about 0.05 of its potential returns per unit of risk. Conifex Timber is currently generating about -0.06 per unit of risk. If you would invest  1,085  in Canadian Solar on May 16, 2025 and sell it today you would earn a total of  83.00  from holding Canadian Solar or generate 7.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Canadian Solar  vs.  Conifex Timber

Canadian Solar

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward indicators, Canadian Solar may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Conifex Timber

Risk-Adjusted Performance

Weakest

Over the last 90 days Conifex Timber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Canadian Solar and Conifex Timber

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

The idea behind Canadian Solar and Conifex Timber 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.