Correlation Between Boralex and S A P

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

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

Diversification Opportunities for Boralex and S A P

0.58

Correlation Coefficient

Boralex  S A P

Very weak diversification

The 3 months correlation between Boralex and SAP is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boralex and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of Boralex i.e., Boralex and S A P go up and down completely randomly.

Pair Corralation between Boralex and S A P

Assuming the 90 days trading horizon Boralex is expected to generate 2.21 times less return on investment than S A P. In addition to that, Boralex is 1.11 times more volatile than Saputo Inc. It trades about 0.05 of its total potential returns per unit of risk. Saputo Inc is currently generating about 0.12 per unit of volatility. If you would invest  2,611  in Saputo Inc on April 25, 2025 and sell it today you would earn a total of  252.00  from holding Saputo Inc or generate 9.65% return on investment over 90 days.

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

Boralex  vs.  Saputo Inc

Boralex

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boralex are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Boralex is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Saputo Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saputo Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, S A P may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Boralex and S A P

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

The idea behind Boralex and Saputo Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.