Correlation Between American Realty and Colliers International

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

By analyzing existing cross correlation between American Realty Investors and Colliers International Group, you can compare the effects of market volatilities on American Realty and Colliers International 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 American Realty with a short position of Colliers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Realty and Colliers International.

Diversification Opportunities for American Realty and Colliers International

0.55

Correlation Coefficient

American Realty  Colliers International

Very weak diversification

The 3 months correlation between American and Colliers is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American Realty Investors and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and American Realty 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 American Realty Investors are associated (or correlated) with Colliers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colliers International has no effect on the direction of American Realty i.e., American Realty and Colliers International go up and down completely randomly.

Pair Corralation between American Realty and Colliers International

Considering the 90-day investment horizon American Realty Investors is expected to under-perform the Colliers International. In addition to that, American Realty is 2.25 times more volatile than Colliers International Group. It trades about -0.07 of its total potential returns per unit of risk. Colliers International Group is currently generating about -0.08 per unit of volatility. If you would invest  13,384  in Colliers International Group on December 29, 2024 and sell it today you would lose (1,365) from holding Colliers International Group or give up 10.2% of portfolio value over 90 days.

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

American Realty Investors  vs.  Colliers International Group

American Realty Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Realty Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Colliers International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Colliers International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with American Realty and Colliers International

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

The idea behind American Realty Investors and Colliers International Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.