Correlation Between Canadian Solar and ECARX Holdings

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

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

Diversification Opportunities for Canadian Solar and ECARX Holdings

0.23

Correlation Coefficient

Canadian Solar  ECARX Holdings

Modest diversification

The 3 months correlation between Canadian and ECARX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and ECARX Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECARX Holdings Class 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 ECARX Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECARX Holdings Class has no effect on the direction of Canadian Solar i.e., Canadian Solar and ECARX Holdings go up and down completely randomly.

Pair Corralation between Canadian Solar and ECARX Holdings

Given the investment horizon of 90 days Canadian Solar is expected to under-perform the ECARX Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Solar is 1.39 times less risky than ECARX Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The ECARX Holdings Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  165.00  in ECARX Holdings Class on June 6, 2025 and sell it today you would lose (10.00) from holding ECARX Holdings Class or give up 6.06% of portfolio value over 90 days.

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

Canadian Solar  vs.  ECARX Holdings Class

Canadian Solar

Risk-Adjusted Performance

Weakest

Over the last 90 days Canadian Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ECARX Holdings Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ECARX Holdings Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ECARX Holdings may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Canadian Solar and ECARX Holdings

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

The idea behind Canadian Solar and ECARX Holdings Class 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.