Correlation Between Western Investment and Colliers International
Can any of the company-specific risk be diversified away by investing in both Western Investment 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 Western Investment and Colliers International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and Colliers International Group, you can compare the effects of market volatilities on Western Investment 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 Western Investment with a short position of Colliers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and Colliers International.
Diversification Opportunities for Western Investment and Colliers International
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Colliers is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Western Investment 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 Western Investment 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 Western Investment i.e., Western Investment and Colliers International go up and down completely randomly.
Pair Corralation between Western Investment and Colliers International
Given the investment horizon of 90 days Western Investment is expected to generate 4.29 times less return on investment than Colliers International. In addition to that, Western Investment is 2.65 times more volatile than Colliers International Group. It trades about 0.02 of its total potential returns per unit of risk. Colliers International Group is currently generating about 0.19 per unit of volatility. If you would invest 15,062 in Colliers International Group on September 3, 2024 and sell it today you would earn a total of 6,403 from holding Colliers International Group or generate 42.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Investment vs. Colliers International Group
Performance |
| Timeline |
| Western Investment |
| Colliers International |
Western Investment and Colliers International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Investment and Colliers International
The main advantage of trading using opposite Western Investment and Colliers International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment 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.| Western Investment vs. Colliers International Group | Western Investment vs. Altus Group Limited | Western Investment vs. Harvest Global REIT | Western Investment vs. International Zeolite Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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