Correlation Between Colliers International and FirstService Corp

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

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

Diversification Opportunities for Colliers International and FirstService Corp

0.55

Correlation Coefficient

Colliers International  FirstService Corp

Very weak diversification

The 3 months correlation between Colliers and FirstService is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Colliers International Group and FirstService Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstService Corp and Colliers International 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 Colliers International Group 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 Colliers International i.e., Colliers International and FirstService Corp go up and down completely randomly.

Pair Corralation between Colliers International and FirstService Corp

Assuming the 90 days trading horizon Colliers International Group is expected to generate 1.62 times more return on investment than FirstService Corp. However, Colliers International is 1.62 times more volatile than FirstService Corp. It trades about 0.21 of its potential returns per unit of risk. FirstService Corp is currently generating about 0.06 per unit of risk. If you would invest  15,413  in Colliers International Group on April 20, 2025 and sell it today you would earn a total of  3,548  from holding Colliers International Group or generate 23.02% return on investment over 90 days.

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

Colliers International Group  vs.  FirstService Corp

Colliers International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Colliers International Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Colliers International displayed solid returns over the last few months and may actually be approaching a breakup point.

FirstService Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, FirstService Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Colliers International and FirstService Corp

The main advantage of trading using opposite Colliers International and FirstService Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colliers International 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 Colliers International Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..