Correlation Between Boralex and Stella Jones
Can any of the company-specific risk be diversified away by investing in both Boralex and Stella Jones 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 Boralex and Stella Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boralex and Stella Jones, you can compare the effects of market volatilities on Boralex and Stella Jones 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 Boralex with a short position of Stella Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boralex and Stella Jones.
Diversification Opportunities for Boralex and Stella Jones
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boralex and Stella is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Boralex and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones and Boralex 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 Boralex are associated (or correlated) with Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of Boralex i.e., Boralex and Stella Jones go up and down completely randomly.
Pair Corralation between Boralex and Stella Jones
Assuming the 90 days trading horizon Boralex is expected to generate 0.55 times more return on investment than Stella Jones. However, Boralex is 1.82 times less risky than Stella Jones. It trades about -0.32 of its potential returns per unit of risk. Stella Jones is currently generating about -0.25 per unit of risk. If you would invest 3,429 in Boralex on August 28, 2024 and sell it today you would lose (417.00) from holding Boralex or give up 12.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boralex vs. Stella Jones
Performance |
| Timeline |
| Boralex |
| Stella Jones |
Boralex and Stella Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boralex and Stella Jones
The main advantage of trading using opposite Boralex and Stella Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boralex position performs unexpectedly, Stella Jones 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 Stella Jones will offset losses from the drop in Stella Jones' long position.| Boralex vs. Innergex Renewable Energy | Boralex vs. Northland Power | Boralex vs. Capital Power | Boralex vs. Brookfield Renewable Partners |
| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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