Correlation Between Stella Jones and FirstService Corp
Can any of the company-specific risk be diversified away by investing in both Stella Jones 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 Stella Jones and FirstService Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and FirstService Corp, you can compare the effects of market volatilities on Stella Jones 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 Stella Jones with a short position of FirstService Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and FirstService Corp.
Diversification Opportunities for Stella Jones and FirstService Corp
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stella and FirstService is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Stella Jones 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 Stella Jones 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 Stella Jones i.e., Stella Jones and FirstService Corp go up and down completely randomly.
Pair Corralation between Stella Jones and FirstService Corp
Assuming the 90 days horizon Stella Jones is expected to under-perform the FirstService Corp. In addition to that, Stella Jones is 3.12 times more volatile than FirstService Corp. It trades about -0.25 of its total potential returns per unit of risk. FirstService Corp is currently generating about 0.23 per unit of volatility. If you would invest 26,146 in FirstService Corp on August 28, 2024 and sell it today you would earn a total of 1,378 from holding FirstService Corp or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. FirstService Corp
Performance |
| Timeline |
| Stella Jones |
| FirstService Corp |
Stella Jones and FirstService Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and FirstService Corp
The main advantage of trading using opposite Stella Jones and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones 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.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| FirstService Corp vs. Colliers International Group | FirstService Corp vs. Altus Group Limited | FirstService Corp vs. CCL Industries | FirstService Corp vs. Ritchie Bros Auctioneers |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets |