Correlation Between Canadian Solar and Mfs Limited

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

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

Diversification Opportunities for Canadian Solar and Mfs Limited

0.79

Correlation Coefficient

Canadian Solar  Mfs Limited

Poor diversification

The 3 months correlation between Canadian and Mfs is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Mfs Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Limited Maturity 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 Mfs Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Limited Maturity has no effect on the direction of Canadian Solar i.e., Canadian Solar and Mfs Limited go up and down completely randomly.

Pair Corralation between Canadian Solar and Mfs Limited

Given the investment horizon of 90 days Canadian Solar is expected to generate 27.2 times more return on investment than Mfs Limited. However, Canadian Solar is 27.2 times more volatile than Mfs Limited Maturity. It trades about 0.15 of its potential returns per unit of risk. Mfs Limited Maturity is currently generating about 0.08 per unit of risk. If you would invest  902.00  in Canadian Solar on April 30, 2025 and sell it today you would earn a total of  334.00  from holding Canadian Solar or generate 37.03% return on investment over 90 days.

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

Canadian Solar  vs.  Mfs Limited Maturity

Canadian Solar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 12 (%) 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.

Mfs Limited Maturity

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Limited Maturity are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Mfs Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canadian Solar and Mfs Limited

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

The idea behind Canadian Solar and Mfs Limited Maturity 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.