Correlation Between Nano Labs and Canadian Solar

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

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

Diversification Opportunities for Nano Labs and Canadian Solar

0.62

Correlation Coefficient

Nano Labs  Canadian Solar

Poor diversification

The 3 months correlation between Nano and Canadian is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Canadian Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Solar and Nano Labs 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 Nano Labs 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 Nano Labs i.e., Nano Labs and Canadian Solar go up and down completely randomly.

Pair Corralation between Nano Labs and Canadian Solar

Allowing for the 90-day total investment horizon Nano Labs is expected to under-perform the Canadian Solar. But the etf apears to be less risky and, when comparing its historical volatility, Nano Labs is 2.36 times less risky than Canadian Solar. The etf trades about -0.18 of its potential returns per unit of risk. The Canadian Solar is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  732.00  in Canadian Solar on February 17, 2025 and sell it today you would earn a total of  353.00  from holding Canadian Solar or generate 48.22% return on investment over 90 days.

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

Nano Labs  vs.  Canadian Solar

Nano Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Canadian Solar

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Solar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Canadian Solar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nano Labs and Canadian Solar

The main advantage of trading using opposite Nano Labs and Canadian Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Labs 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 Nano Labs 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.