Correlation Between MaxLinear and Canadian Solar
Can any of the company-specific risk be diversified away by investing in both MaxLinear 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 MaxLinear and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MaxLinear and Canadian Solar, you can compare the effects of market volatilities on MaxLinear 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 MaxLinear with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of MaxLinear and Canadian Solar.
Diversification Opportunities for MaxLinear and Canadian Solar
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MaxLinear and Canadian is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding MaxLinear and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and MaxLinear 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 MaxLinear 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 MaxLinear i.e., MaxLinear and Canadian Solar go up and down completely randomly.
Pair Corralation between MaxLinear and Canadian Solar
Considering the 90-day investment horizon MaxLinear is expected to generate 1.08 times more return on investment than Canadian Solar. However, MaxLinear is 1.08 times more volatile than Canadian Solar. It trades about 0.03 of its potential returns per unit of risk. Canadian Solar is currently generating about -0.01 per unit of risk. If you would invest 2,003 in MaxLinear on September 25, 2024 and sell it today you would earn a total of 15.00 from holding MaxLinear or generate 0.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MaxLinear vs. Canadian Solar
Performance |
Timeline |
MaxLinear |
Canadian Solar |
MaxLinear and Canadian Solar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MaxLinear and Canadian Solar
The main advantage of trading using opposite MaxLinear and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MaxLinear 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.MaxLinear vs. ASE Industrial Holding | MaxLinear vs. Himax Technologies | MaxLinear vs. United Microelectronics | MaxLinear vs. SemiLEDS |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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