Correlation Between GraniteShares 125x and Canadian Solar

Can any of the company-specific risk be diversified away by investing in both GraniteShares 125x 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 GraniteShares 125x and Canadian Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 125x Long and Canadian Solar, you can compare the effects of market volatilities on GraniteShares 125x 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 GraniteShares 125x with a short position of Canadian Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 125x and Canadian Solar.

Diversification Opportunities for GraniteShares 125x and Canadian Solar

-0.57

Correlation Coefficient

GraniteShares 125x  Canadian Solar

Excellent diversification

The 3 months correlation between GraniteShares and Canadian is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 125x Long and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and GraniteShares 125x 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 GraniteShares 125x Long 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 GraniteShares 125x i.e., GraniteShares 125x and Canadian Solar go up and down completely randomly.

Pair Corralation between GraniteShares 125x and Canadian Solar

Considering the 90-day investment horizon GraniteShares 125x Long is expected to generate 1.02 times more return on investment than Canadian Solar. However, GraniteShares 125x is 1.02 times more volatile than Canadian Solar. It trades about 0.35 of its potential returns per unit of risk. Canadian Solar is currently generating about -0.08 per unit of risk. If you would invest  1,484  in GraniteShares 125x Long on September 21, 2024 and sell it today you would earn a total of  530.00  from holding GraniteShares 125x Long or generate 35.71% return on investment over 90 days.

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

GraniteShares 125x Long  vs.  Canadian Solar

GraniteShares 125x Long

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 125x Long are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, GraniteShares 125x disclosed solid returns over the last few months and may actually be approaching a breakup point.

Canadian Solar

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with GraniteShares 125x and Canadian Solar

The main advantage of trading using opposite GraniteShares 125x and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 125x 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 GraniteShares 125x Long 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.