Correlation Between FirstService Corp and Marine Products

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

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

Diversification Opportunities for FirstService Corp and Marine Products

0.41

Correlation Coefficient

FirstService Corp  Marine Products

Very weak diversification

The 3 months correlation between FirstService and Marine is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of FirstService Corp i.e., FirstService Corp and Marine Products go up and down completely randomly.

Pair Corralation between FirstService Corp and Marine Products

Considering the 90-day investment horizon FirstService Corp is expected to generate 0.72 times more return on investment than Marine Products. However, FirstService Corp is 1.4 times less risky than Marine Products. It trades about 0.13 of its potential returns per unit of risk. Marine Products is currently generating about 0.04 per unit of risk. If you would invest  17,373  in FirstService Corp on May 4, 2025 and sell it today you would earn a total of  2,207  from holding FirstService Corp or generate 12.7% return on investment over 90 days.

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

FirstService Corp  vs.  Marine Products

FirstService Corp

Risk-Adjusted Performance

Good

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.

Marine Products

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marine Products are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Marine Products is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FirstService Corp and Marine Products

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

The idea behind FirstService Corp and Marine Products 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.