Correlation Between Canadian Solar and Kopin

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

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

Diversification Opportunities for Canadian Solar and Kopin

-0.74

Correlation Coefficient

Canadian Solar  Kopin

Pay attention - limited upside

The 3 months correlation between Canadian and Kopin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Solar and Kopin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopin 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 Kopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopin has no effect on the direction of Canadian Solar i.e., Canadian Solar and Kopin go up and down completely randomly.

Pair Corralation between Canadian Solar and Kopin

Given the investment horizon of 90 days Canadian Solar is expected to under-perform the Kopin. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Solar is 1.39 times less risky than Kopin. The stock trades about -0.04 of its potential returns per unit of risk. The Kopin is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Kopin on December 2, 2024 and sell it today you would earn a total of  8.00  from holding Kopin or generate 6.15% return on investment over 90 days.

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

Canadian Solar  vs.  Kopin

Canadian Solar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian Solar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kopin

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kopin are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Kopin displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian Solar and Kopin

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

The idea behind Canadian Solar and Kopin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.