Correlation Between Element Fleet and Colliers International

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

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

Diversification Opportunities for Element Fleet and Colliers International

0.41

Correlation Coefficient

Element Fleet  Colliers International

Very weak diversification

The 3 months correlation between Element and Colliers is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Colliers International go up and down completely randomly.

Pair Corralation between Element Fleet and Colliers International

Assuming the 90 days trading horizon Element Fleet Management is expected to generate 0.57 times more return on investment than Colliers International. However, Element Fleet Management is 1.75 times less risky than Colliers International. It trades about -0.03 of its potential returns per unit of risk. Colliers International Group is currently generating about -0.13 per unit of risk. If you would invest  2,957  in Element Fleet Management on November 29, 2024 and sell it today you would lose (57.00) from holding Element Fleet Management or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Element Fleet Management  vs.  Colliers International Group

Element Fleet Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Element Fleet Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Element Fleet is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Element Fleet and Colliers International

The main advantage of trading using opposite Element Fleet and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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 Element Fleet Management 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.