Correlation Between Canadian Solar and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Canadian Solar and Intact Financial 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 Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Solar and Intact Financial, you can compare the effects of market volatilities on Canadian Solar and Intact Financial 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 Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Solar and Intact Financial.
Diversification Opportunities for Canadian Solar and Intact Financial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canadian and Intact is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial 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 Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial has no effect on the direction of Canadian Solar i.e., Canadian Solar and Intact Financial go up and down completely randomly.
Pair Corralation between Canadian Solar and Intact Financial
Given the investment horizon of 90 days Canadian Solar is expected to generate 3.78 times more return on investment than Intact Financial. However, Canadian Solar is 3.78 times more volatile than Intact Financial. It trades about 0.13 of its potential returns per unit of risk. Intact Financial is currently generating about 0.02 per unit of risk. If you would invest 965.00 in Canadian Solar on April 29, 2025 and sell it today you would earn a total of 296.00 from holding Canadian Solar or generate 30.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Solar vs. Intact Financial
Performance |
Timeline |
Canadian Solar |
Intact Financial |
Canadian Solar and Intact Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Solar and Intact Financial
The main advantage of trading using opposite Canadian Solar and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Solar position performs unexpectedly, Intact Financial 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 Intact Financial will offset losses from the drop in Intact Financial's long position.Canadian Solar vs. JinkoSolar Holding | Canadian Solar vs. First Solar | Canadian Solar vs. Complete Solaria, | Canadian Solar vs. SolarEdge Technologies |
Intact Financial vs. iA Financial | Intact Financial vs. Thomson Reuters Corp | Intact Financial vs. Metro Inc | Intact Financial vs. Waste Connections |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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