Correlation Between Sunworks and Canadian Solar

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

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

Diversification Opportunities for Sunworks and Canadian Solar

0.0

Correlation Coefficient

Sunworks  Canadian Solar

Pay attention - limited upside

The 3 months correlation between Sunworks and Canadian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sunworks and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and Sunworks 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 Sunworks are associated (or correlated) with Canadian Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Solar has no effect on the direction of Sunworks i.e., Sunworks and Canadian Solar go up and down completely randomly.

Pair Corralation between Sunworks and Canadian Solar

If you would invest  918.00  in Canadian Solar on May 3, 2025 and sell it today you would earn a total of  231.00  from holding Canadian Solar or generate 25.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sunworks  vs.  Canadian Solar

Sunworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunworks has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sunworks is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Sunworks and Canadian Solar

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

The idea behind Sunworks and Canadian Solar 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.