Correlation Between Redfin Corp and Colliers International

Can any of the company-specific risk be diversified away by investing in both Redfin 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 Redfin 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 Redfin Corp and Colliers International Group, you can compare the effects of market volatilities on Redfin 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 Redfin Corp with a short position of Colliers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redfin Corp and Colliers International.

Diversification Opportunities for Redfin Corp and Colliers International

0.01

Correlation Coefficient

Redfin Corp  Colliers International

Significant diversification

The 3 months correlation between Redfin and Colliers is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Redfin 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 Redfin 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 Redfin 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 Redfin Corp i.e., Redfin Corp and Colliers International go up and down completely randomly.

Pair Corralation between Redfin Corp and Colliers International

Given the investment horizon of 90 days Redfin Corp is expected to under-perform the Colliers International. In addition to that, Redfin Corp is 3.43 times more volatile than Colliers International Group. It trades about -0.03 of its total potential returns per unit of risk. Colliers International Group is currently generating about 0.03 per unit of volatility. If you would invest  14,373  in Colliers International Group on September 12, 2024 and sell it today you would earn a total of  367.00  from holding Colliers International Group or generate 2.55% return on investment over 90 days.

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

Redfin Corp  vs.  Colliers International Group

Redfin Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Colliers International

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Colliers International Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Colliers International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Redfin Corp and Colliers International

The main advantage of trading using opposite Redfin Corp and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redfin 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 Redfin 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.