Correlation Between Boralex and Gildan Activewear

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

By analyzing existing cross correlation between Boralex and Gildan Activewear, you can compare the effects of market volatilities on Boralex and Gildan Activewear 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 Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boralex and Gildan Activewear.

Diversification Opportunities for Boralex and Gildan Activewear

0.44

Correlation Coefficient

Boralex  Gildan Activewear

Very weak diversification

The 3 months correlation between Boralex and Gildan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Boralex and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Boralex i.e., Boralex and Gildan Activewear go up and down completely randomly.

Pair Corralation between Boralex and Gildan Activewear

Assuming the 90 days trading horizon Boralex is expected to generate 3.33 times less return on investment than Gildan Activewear. But when comparing it to its historical volatility, Boralex is 1.33 times less risky than Gildan Activewear. It trades about 0.09 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  5,623  in Gildan Activewear on April 20, 2025 and sell it today you would earn a total of  1,567  from holding Gildan Activewear or generate 27.87% return on investment over 90 days.

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

Boralex  vs.  Gildan Activewear

Boralex

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boralex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Boralex may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Gildan Activewear

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Gildan Activewear displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boralex and Gildan Activewear

The main advantage of trading using opposite Boralex and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boralex position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.

The idea behind Boralex and Gildan Activewear 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.