Correlation Between Frp Holdings and Colliers International

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

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

Diversification Opportunities for Frp Holdings and Colliers International

0.49

Correlation Coefficient

Frp Holdings  Colliers International

Very weak diversification

The 3 months correlation between Frp and Colliers is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Frp Holdings Ord and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Frp Holdings 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 Frp Holdings Ord 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 Frp Holdings i.e., Frp Holdings and Colliers International go up and down completely randomly.

Pair Corralation between Frp Holdings and Colliers International

Given the investment horizon of 90 days Frp Holdings Ord is expected to generate 0.77 times more return on investment than Colliers International. However, Frp Holdings Ord is 1.3 times less risky than Colliers International. It trades about -0.05 of its potential returns per unit of risk. Colliers International Group is currently generating about -0.06 per unit of risk. If you would invest  3,026  in Frp Holdings Ord on December 28, 2024 and sell it today you would lose (140.00) from holding Frp Holdings Ord or give up 4.63% of portfolio value over 90 days.

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

Frp Holdings Ord  vs.  Colliers International Group

Frp Holdings Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frp Holdings Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Frp Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 Frp Holdings and Colliers International

The main advantage of trading using opposite Frp Holdings and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frp Holdings 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 Frp Holdings Ord 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.