Correlation Between Canadian Solar and Enags SA

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

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

Diversification Opportunities for Canadian Solar and Enags SA

-0.18

Correlation Coefficient

Canadian Solar  Enags SA

Good diversification

The 3 months correlation between Canadian and Enags is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enags SA 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 Enags SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enags SA has no effect on the direction of Canadian Solar i.e., Canadian Solar and Enags SA go up and down completely randomly.

Pair Corralation between Canadian Solar and Enags SA

Given the investment horizon of 90 days Canadian Solar is expected to generate 6.57 times more return on investment than Enags SA. However, Canadian Solar is 6.57 times more volatile than Enags SA. It trades about 0.02 of its potential returns per unit of risk. Enags SA is currently generating about -0.04 per unit of risk. If you would invest  1,109  in Canadian Solar on June 15, 2025 and sell it today you would lose (20.00) from holding Canadian Solar or give up 1.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Canadian Solar  vs.  Enags SA

Canadian Solar

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Canadian Solar is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Enags SA

Risk-Adjusted Performance

Weakest

Over the last 90 days Enags SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Enags SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Canadian Solar and Enags SA

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

The idea behind Canadian Solar and Enags SA 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.