Correlation Between FirstService Corp and Goodfellow

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

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

Diversification Opportunities for FirstService Corp and Goodfellow

-0.71

Correlation Coefficient

FirstService Corp  Goodfellow

Pay attention - limited upside

The 3 months correlation between FirstService and Goodfellow is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Goodfellow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfellow and FirstService Corp 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 FirstService Corp are associated (or correlated) with Goodfellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfellow has no effect on the direction of FirstService Corp i.e., FirstService Corp and Goodfellow go up and down completely randomly.

Pair Corralation between FirstService Corp and Goodfellow

Assuming the 90 days trading horizon FirstService Corp is expected to generate 0.81 times more return on investment than Goodfellow. However, FirstService Corp is 1.23 times less risky than Goodfellow. It trades about 0.12 of its potential returns per unit of risk. Goodfellow is currently generating about -0.05 per unit of risk. If you would invest  24,483  in FirstService Corp on May 19, 2025 and sell it today you would earn a total of  2,917  from holding FirstService Corp or generate 11.91% return on investment over 90 days.

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

FirstService Corp  vs.  Goodfellow

FirstService Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FirstService Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Goodfellow

Risk-Adjusted Performance

Weakest

Over the last 90 days Goodfellow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Goodfellow is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FirstService Corp and Goodfellow

The main advantage of trading using opposite FirstService Corp and Goodfellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstService Corp position performs unexpectedly, Goodfellow 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 Goodfellow will offset losses from the drop in Goodfellow's long position.

The idea behind FirstService Corp and Goodfellow 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.