Correlation Between Canadian Solar and Kinetics Paradigm

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

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

Diversification Opportunities for Canadian Solar and Kinetics Paradigm

-0.38

Correlation Coefficient

Canadian Solar  Kinetics Paradigm

Very good diversification

The 3 months correlation between Canadian and Kinetics is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm 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 Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Canadian Solar i.e., Canadian Solar and Kinetics Paradigm go up and down completely randomly.

Pair Corralation between Canadian Solar and Kinetics Paradigm

Given the investment horizon of 90 days Canadian Solar is expected to generate 2.24 times more return on investment than Kinetics Paradigm. However, Canadian Solar is 2.24 times more volatile than Kinetics Paradigm Fund. It trades about 0.08 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about -0.27 per unit of risk. If you would invest  1,093  in Canadian Solar on May 20, 2025 and sell it today you would earn a total of  176.00  from holding Canadian Solar or generate 16.1% return on investment over 90 days.

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

Canadian Solar  vs.  Kinetics Paradigm Fund

Canadian Solar

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 6 (%) 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.

Kinetics Paradigm

Risk-Adjusted Performance

Weakest

Over the last 90 days Kinetics Paradigm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Canadian Solar and Kinetics Paradigm

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

The idea behind Canadian Solar and Kinetics Paradigm Fund 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.