Correlation Between FirstService Corp and Calibre Mining

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

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

Diversification Opportunities for FirstService Corp and Calibre Mining

-0.49

Correlation Coefficient

FirstService Corp  Calibre Mining

Very good diversification

The 3 months correlation between FirstService and Calibre is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and FirstService Corp 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 FirstService Corp are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of FirstService Corp i.e., FirstService Corp and Calibre Mining go up and down completely randomly.

Pair Corralation between FirstService Corp and Calibre Mining

Assuming the 90 days trading horizon FirstService Corp is expected to generate 0.39 times more return on investment than Calibre Mining. However, FirstService Corp is 2.58 times less risky than Calibre Mining. It trades about 0.15 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.07 per unit of risk. If you would invest  24,431  in FirstService Corp on September 19, 2024 and sell it today you would earn a total of  2,269  from holding FirstService Corp or generate 9.29% return on investment over 90 days.

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

FirstService Corp  vs.  Calibre Mining Corp

FirstService Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, FirstService Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with FirstService Corp and Calibre Mining

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

The idea behind FirstService Corp and Calibre Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.