Correlation Between Colliers International and Winpak

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

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

Diversification Opportunities for Colliers International and Winpak

0.72

Correlation Coefficient

Colliers International  Winpak

Poor diversification

The 3 months correlation between Colliers and Winpak is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Colliers International Group and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak and Colliers International 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 Colliers International Group are associated (or correlated) with Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Colliers International i.e., Colliers International and Winpak go up and down completely randomly.

Pair Corralation between Colliers International and Winpak

Assuming the 90 days trading horizon Colliers International Group is expected to generate 1.4 times more return on investment than Winpak. However, Colliers International is 1.4 times more volatile than Winpak. It trades about -0.1 of its potential returns per unit of risk. Winpak is currently generating about -0.16 per unit of risk. If you would invest  19,548  in Colliers International Group on December 31, 2024 and sell it today you would lose (2,303) from holding Colliers International Group or give up 11.78% of portfolio value over 90 days.

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

Colliers International Group  vs.  Winpak

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. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Winpak

Risk-Adjusted Performance

Very Weak

Over the last 90 days Winpak has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Colliers International and Winpak

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

The idea behind Colliers International Group and Winpak 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.