Correlation Between Alset Ehome and FirstService Corp

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

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

Diversification Opportunities for Alset Ehome and FirstService Corp

0.63

Correlation Coefficient

Alset Ehome  FirstService Corp

Poor diversification

The 3 months correlation between Alset and FirstService is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Alset Ehome 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 Alset Ehome International 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 Alset Ehome i.e., Alset Ehome and FirstService Corp go up and down completely randomly.

Pair Corralation between Alset Ehome and FirstService Corp

Considering the 90-day investment horizon Alset Ehome International is expected to generate 5.02 times more return on investment than FirstService Corp. However, Alset Ehome is 5.02 times more volatile than FirstService Corp. It trades about 0.11 of its potential returns per unit of risk. FirstService Corp is currently generating about 0.13 per unit of risk. If you would invest  95.00  in Alset Ehome International on May 20, 2025 and sell it today you would earn a total of  39.00  from holding Alset Ehome International or generate 41.05% return on investment over 90 days.

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

Alset Ehome International  vs.  FirstService Corp

Alset Ehome International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alset Ehome International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Alset Ehome demonstrated solid returns over the last few months and may actually be approaching a breakup point.

FirstService Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, FirstService Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alset Ehome and FirstService Corp

The main advantage of trading using opposite Alset Ehome and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alset Ehome 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.

The idea behind Alset Ehome International and FirstService Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..