Correlation Between FirstService Corp and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both FirstService Corp and Centerra Gold 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 Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstService Corp and Centerra Gold, you can compare the effects of market volatilities on FirstService Corp and Centerra Gold 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstService Corp and Centerra Gold.
Diversification Opportunities for FirstService Corp and Centerra Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FirstService and Centerra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of FirstService Corp i.e., FirstService Corp and Centerra Gold go up and down completely randomly.
Pair Corralation between FirstService Corp and Centerra Gold
Assuming the 90 days trading horizon FirstService Corp is expected to generate 0.46 times more return on investment than Centerra Gold. However, FirstService Corp is 2.2 times less risky than Centerra Gold. It trades about 0.09 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.03 per unit of risk. If you would invest 16,441 in FirstService Corp on September 12, 2024 and sell it today you would earn a total of 10,559 from holding FirstService Corp or generate 64.22% 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. Centerra Gold
Performance |
| Timeline |
| FirstService Corp |
| Centerra Gold |
FirstService Corp and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstService Corp and Centerra Gold
The main advantage of trading using opposite FirstService Corp and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstService Corp position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| FirstService Corp vs. InterRent Real Estate | FirstService Corp vs. Canadian Apartment Properties | FirstService Corp vs. Granite Real Estate | FirstService Corp vs. Crombie Real Estate |
| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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