Correlation Between Canadian Solar and TAAT Global

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

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

Diversification Opportunities for Canadian Solar and TAAT Global

-0.28

Correlation Coefficient

Canadian Solar  TAAT Global

Very good diversification

The 3 months correlation between Canadian and TAAT is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and TAAT Global Alternatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAAT Global Alternatives 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 TAAT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAAT Global Alternatives has no effect on the direction of Canadian Solar i.e., Canadian Solar and TAAT Global go up and down completely randomly.

Pair Corralation between Canadian Solar and TAAT Global

Given the investment horizon of 90 days Canadian Solar is expected to generate 1.1 times less return on investment than TAAT Global. But when comparing it to its historical volatility, Canadian Solar is 3.06 times less risky than TAAT Global. It trades about 0.11 of its potential returns per unit of risk. TAAT Global Alternatives is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  13.00  in TAAT Global Alternatives on May 1, 2025 and sell it today you would lose (2.00) from holding TAAT Global Alternatives or give up 15.38% of portfolio value over 90 days.

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

Canadian Solar  vs.  TAAT Global Alternatives

Canadian Solar

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 8 (%) 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.

TAAT Global Alternatives

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TAAT Global Alternatives are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, TAAT Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian Solar and TAAT Global

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

The idea behind Canadian Solar and TAAT Global Alternatives 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.