Correlation Between Goeasy and FirstService Corp
Can any of the company-specific risk be diversified away by investing in both Goeasy 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 Goeasy and FirstService Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between goeasy and FirstService Corp, you can compare the effects of market volatilities on Goeasy 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 Goeasy with a short position of FirstService Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goeasy and FirstService Corp.
Diversification Opportunities for Goeasy and FirstService Corp
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goeasy and FirstService is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding goeasy and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Goeasy 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 goeasy 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 Goeasy i.e., Goeasy and FirstService Corp go up and down completely randomly.
Pair Corralation between Goeasy and FirstService Corp
Assuming the 90 days trading horizon goeasy is expected to under-perform the FirstService Corp. In addition to that, Goeasy is 1.79 times more volatile than FirstService Corp. It trades about -0.06 of its total potential returns per unit of risk. FirstService Corp is currently generating about 0.16 per unit of volatility. If you would invest 24,489 in FirstService Corp on September 12, 2024 and sell it today you would earn a total of 2,511 from holding FirstService Corp or generate 10.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
goeasy vs. FirstService Corp
Performance |
Timeline |
goeasy |
FirstService Corp |
Goeasy and FirstService Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goeasy and FirstService Corp
The main advantage of trading using opposite Goeasy and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goeasy 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.Goeasy vs. TGS Esports | Goeasy vs. Network Media Group | Goeasy vs. Verizon Communications CDR | Goeasy vs. Plaza Retail REIT |
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Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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