Correlation Between Financial and Colliers International
Can any of the company-specific risk be diversified away by investing in both Financial 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 Financial and Colliers International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Colliers International Group, you can compare the effects of market volatilities on Financial 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 Financial with a short position of Colliers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Colliers International.
Diversification Opportunities for Financial and Colliers International
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Financial and Colliers is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Financial 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 Financial 15 Split 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 Financial i.e., Financial and Colliers International go up and down completely randomly.
Pair Corralation between Financial and Colliers International
Assuming the 90 days trading horizon Financial is expected to generate 2.74 times less return on investment than Colliers International. But when comparing it to its historical volatility, Financial 15 Split is 7.06 times less risky than Colliers International. It trades about 0.25 of its potential returns per unit of risk. Colliers International Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14,832 in Colliers International Group on September 3, 2024 and sell it today you would earn a total of 6,633 from holding Colliers International Group or generate 44.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial 15 Split vs. Colliers International Group
Performance |
| Timeline |
| Financial 15 Split |
| Colliers International |
Financial and Colliers International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Colliers International
The main advantage of trading using opposite Financial and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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.| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
| Colliers International vs. FirstService Corp | Colliers International vs. Altus Group Limited | Colliers International vs. Ritchie Bros Auctioneers | Colliers International vs. Winpak |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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