Correlation Between Boralex and 5N Plus

Can any of the company-specific risk be diversified away by investing in both Boralex and 5N Plus 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 5N Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boralex and 5N Plus, you can compare the effects of market volatilities on Boralex and 5N Plus 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 5N Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boralex and 5N Plus.

Diversification Opportunities for Boralex and 5N Plus

-0.2

Correlation Coefficient

Boralex  5N Plus

Good diversification

The 3 months correlation between Boralex and FPLSF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Boralex and 5N Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5N Plus 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 5N Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5N Plus has no effect on the direction of Boralex i.e., Boralex and 5N Plus go up and down completely randomly.

Pair Corralation between Boralex and 5N Plus

Assuming the 90 days trading horizon Boralex is expected to under-perform the 5N Plus. But the stock apears to be less risky and, when comparing its historical volatility, Boralex is 3.21 times less risky than 5N Plus. The stock trades about -0.02 of its potential returns per unit of risk. The 5N Plus is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  613.00  in 5N Plus on May 14, 2025 and sell it today you would earn a total of  488.00  from holding 5N Plus or generate 79.61% return on investment over 90 days.

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

Boralex  vs.  5N Plus

Boralex

Risk-Adjusted Performance

Weakest

Over the last 90 days Boralex has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

5N Plus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 5N Plus are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, 5N Plus reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boralex and 5N Plus

The main advantage of trading using opposite Boralex and 5N Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boralex position performs unexpectedly, 5N Plus 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 5N Plus will offset losses from the drop in 5N Plus' long position.

The idea behind Boralex and 5N Plus 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..