Correlation Between Transcontinental and Boralex
Can any of the company-specific risk be diversified away by investing in both Transcontinental and Boralex 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 Transcontinental and Boralex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcontinental and Boralex, you can compare the effects of market volatilities on Transcontinental and Boralex 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 Transcontinental with a short position of Boralex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and Boralex.
Diversification Opportunities for Transcontinental and Boralex
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transcontinental and Boralex is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and Boralex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boralex and Transcontinental 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 Transcontinental are associated (or correlated) with Boralex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boralex has no effect on the direction of Transcontinental i.e., Transcontinental and Boralex go up and down completely randomly.
Pair Corralation between Transcontinental and Boralex
Assuming the 90 days trading horizon Transcontinental is expected to generate 0.47 times more return on investment than Boralex. However, Transcontinental is 2.11 times less risky than Boralex. It trades about -0.14 of its potential returns per unit of risk. Boralex is currently generating about -0.25 per unit of risk. If you would invest 1,748 in Transcontinental on August 31, 2024 and sell it today you would lose (48.00) from holding Transcontinental or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcontinental vs. Boralex
Performance |
| Timeline |
| Transcontinental |
| Boralex |
Transcontinental and Boralex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcontinental and Boralex
The main advantage of trading using opposite Transcontinental and Boralex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental position performs unexpectedly, Boralex 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 Boralex will offset losses from the drop in Boralex's long position.| Transcontinental vs. Cogeco Communications | Transcontinental vs. Quebecor | Transcontinental vs. CCL Industries | Transcontinental vs. Finning International |
| Boralex vs. Innergex Renewable Energy | Boralex vs. Northland Power | Boralex vs. Capital Power | Boralex vs. Brookfield Renewable Partners |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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