Correlation Between Boralex and WSP Global
Can any of the company-specific risk be diversified away by investing in both Boralex and WSP Global 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 WSP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boralex and WSP Global, you can compare the effects of market volatilities on Boralex and WSP Global 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 WSP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boralex and WSP Global.
Diversification Opportunities for Boralex and WSP Global
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boralex and WSP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Boralex and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global 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 WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of Boralex i.e., Boralex and WSP Global go up and down completely randomly.
Pair Corralation between Boralex and WSP Global
Assuming the 90 days trading horizon Boralex is expected to under-perform the WSP Global. In addition to that, Boralex is 1.47 times more volatile than WSP Global. It trades about -0.02 of its total potential returns per unit of risk. WSP Global is currently generating about 0.08 per unit of volatility. If you would invest 15,912 in WSP Global on August 26, 2024 and sell it today you would earn a total of 8,654 from holding WSP Global or generate 54.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boralex vs. WSP Global
Performance |
| Timeline |
| Boralex |
| WSP Global |
Boralex and WSP Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boralex and WSP Global
The main advantage of trading using opposite Boralex and WSP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boralex position performs unexpectedly, WSP Global 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 WSP Global will offset losses from the drop in WSP Global's long position.| Boralex vs. Innergex Renewable Energy | Boralex vs. Northland Power | Boralex vs. Capital Power | Boralex vs. Brookfield Renewable Partners |
| WSP Global vs. TFI International | WSP Global vs. Stantec | WSP Global vs. Waste Connections | WSP Global vs. CGI Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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