Correlation Between Cushman Wakefield and FirstService Corp

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

By analyzing existing cross correlation between Cushman Wakefield plc and FirstService Corp, you can compare the effects of market volatilities on Cushman Wakefield and FirstService Corp 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 Cushman Wakefield with a short position of FirstService Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cushman Wakefield and FirstService Corp.

Diversification Opportunities for Cushman Wakefield and FirstService Corp

0.82

Correlation Coefficient

Cushman Wakefield  FirstService Corp

Very poor diversification

The 3 months correlation between Cushman and FirstService is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cushman Wakefield plc and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Cushman Wakefield 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 Cushman Wakefield plc are associated (or correlated) with FirstService Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstService Corp has no effect on the direction of Cushman Wakefield i.e., Cushman Wakefield and FirstService Corp go up and down completely randomly.

Pair Corralation between Cushman Wakefield and FirstService Corp

Considering the 90-day investment horizon Cushman Wakefield plc is expected to under-perform the FirstService Corp. In addition to that, Cushman Wakefield is 1.78 times more volatile than FirstService Corp. It trades about -0.15 of its total potential returns per unit of risk. FirstService Corp is currently generating about -0.1 per unit of volatility. If you would invest  18,124  in FirstService Corp on December 30, 2024 and sell it today you would lose (1,519) from holding FirstService Corp or give up 8.38% of portfolio value over 90 days.

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

Cushman Wakefield plc  vs.  FirstService Corp

Cushman Wakefield plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cushman Wakefield plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady 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.

FirstService Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days FirstService Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Cushman Wakefield and FirstService Corp

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

The idea behind Cushman Wakefield plc and FirstService Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.