Correlation Between Innergex Renewable and Boralex

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

By analyzing existing cross correlation between Innergex Renewable Energy and Boralex, you can compare the effects of market volatilities on Innergex Renewable 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 Innergex Renewable with a short position of Boralex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Boralex.

Diversification Opportunities for Innergex Renewable and Boralex

0.6

Correlation Coefficient

Innergex Renewable  Boralex

Poor diversification

The 3 months correlation between Innergex and Boralex is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Boralex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boralex and Innergex Renewable 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 Innergex Renewable Energy 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 Innergex Renewable i.e., Innergex Renewable and Boralex go up and down completely randomly.

Pair Corralation between Innergex Renewable and Boralex

Assuming the 90 days trading horizon Innergex Renewable is expected to generate 4.35 times less return on investment than Boralex. But when comparing it to its historical volatility, Innergex Renewable Energy is 7.62 times less risky than Boralex. It trades about 0.19 of its potential returns per unit of risk. Boralex is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,000  in Boralex on April 23, 2025 and sell it today you would earn a total of  292.00  from holding Boralex or generate 9.73% return on investment over 90 days.

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

Innergex Renewable Energy  vs.  Boralex

Innergex Renewable Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innergex Renewable Energy are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Innergex Renewable is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Boralex

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boralex are ranked lower than 8 (%) 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.

Pair Trading with Innergex Renewable and Boralex

The main advantage of trading using opposite Innergex Renewable and Boralex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable 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.

The idea behind Innergex Renewable Energy and Boralex 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..