Correlation Between FirstService Corp and Colliers International

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

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

Diversification Opportunities for FirstService Corp and Colliers International

0.83

Correlation Coefficient

FirstService Corp  Colliers International

Very poor diversification

The 3 months correlation between FirstService and Colliers is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International 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 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 FirstService Corp i.e., FirstService Corp and Colliers International go up and down completely randomly.

Pair Corralation between FirstService Corp and Colliers International

Considering the 90-day investment horizon FirstService Corp is expected to under-perform the Colliers International. But the stock apears to be less risky and, when comparing its historical volatility, FirstService Corp is 1.43 times less risky than Colliers International. The stock trades about -0.1 of its potential returns per unit of risk. The Colliers International Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  13,384  in Colliers International Group on December 28, 2024 and sell it today you would lose (1,100) from holding Colliers International Group or give up 8.22% of portfolio value over 90 days.

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

FirstService Corp  vs.  Colliers International Group

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.

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 FirstService Corp and Colliers International

The main advantage of trading using opposite FirstService Corp and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstService Corp 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 FirstService Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.