Correlation Between Canadian Solar and Pyxus International

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

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

Diversification Opportunities for Canadian Solar and Pyxus International

0.76

Correlation Coefficient

Canadian Solar  Pyxus International

Poor diversification

The 3 months correlation between Canadian and Pyxus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Pyxus International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxus International 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 Pyxus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxus International has no effect on the direction of Canadian Solar i.e., Canadian Solar and Pyxus International go up and down completely randomly.

Pair Corralation between Canadian Solar and Pyxus International

Given the investment horizon of 90 days Canadian Solar is expected to generate 1.13 times less return on investment than Pyxus International. In addition to that, Canadian Solar is 1.31 times more volatile than Pyxus International. It trades about 0.13 of its total potential returns per unit of risk. Pyxus International is currently generating about 0.19 per unit of volatility. If you would invest  381.00  in Pyxus International on April 28, 2025 and sell it today you would earn a total of  144.00  from holding Pyxus International or generate 37.8% 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.  Pyxus International

Canadian Solar

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 9 (%) 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.

Pyxus International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pyxus International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Pyxus International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian Solar and Pyxus International

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

The idea behind Canadian Solar and Pyxus International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.