Correlation Between Stantec and Colliers International

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

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

Diversification Opportunities for Stantec and Colliers International

0.5

Correlation Coefficient

Stantec  Colliers International

Very weak diversification

The 3 months correlation between Stantec and Colliers is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stantec and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Stantec 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 Stantec 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 Stantec i.e., Stantec and Colliers International go up and down completely randomly.

Pair Corralation between Stantec and Colliers International

Assuming the 90 days trading horizon Stantec is expected to generate 0.64 times more return on investment than Colliers International. However, Stantec is 1.56 times less risky than Colliers International. It trades about -0.4 of its potential returns per unit of risk. Colliers International Group is currently generating about -0.4 per unit of risk. If you would invest  12,161  in Stantec on September 24, 2024 and sell it today you would lose (775.00) from holding Stantec or give up 6.37% of portfolio value over 90 days.

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

Stantec  vs.  Colliers International Group

Stantec

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stantec are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Stantec is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Colliers International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Colliers International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Colliers International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Stantec and Colliers International

The main advantage of trading using opposite Stantec and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stantec 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 Stantec 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.