Correlation Between FirstService Corp and XChange TECINC

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

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

Diversification Opportunities for FirstService Corp and XChange TECINC

-0.34

Correlation Coefficient

FirstService Corp  XChange TECINC

Very good diversification

The 3 months correlation between FirstService and XChange is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and XChange TECINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XChange TECINC 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 XChange TECINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XChange TECINC has no effect on the direction of FirstService Corp i.e., FirstService Corp and XChange TECINC go up and down completely randomly.

Pair Corralation between FirstService Corp and XChange TECINC

Considering the 90-day investment horizon FirstService Corp is expected to generate 0.23 times more return on investment than XChange TECINC. However, FirstService Corp is 4.44 times less risky than XChange TECINC. It trades about 0.14 of its potential returns per unit of risk. XChange TECINC is currently generating about -0.1 per unit of risk. If you would invest  17,373  in FirstService Corp on May 3, 2025 and sell it today you would earn a total of  2,349  from holding FirstService Corp or generate 13.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

FirstService Corp  vs.  XChange TECINC

FirstService Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 11 (%) 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.

XChange TECINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days XChange TECINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FirstService Corp and XChange TECINC

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

The idea behind FirstService Corp and XChange TECINC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.