Correlation Between FirstService Corp and J W

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

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

Diversification Opportunities for FirstService Corp and J W

-0.09

Correlation Coefficient

FirstService Corp  J W

Good diversification

The 3 months correlation between FirstService and MAYS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and J W Mays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J W Mays 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 J W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J W Mays has no effect on the direction of FirstService Corp i.e., FirstService Corp and J W go up and down completely randomly.

Pair Corralation between FirstService Corp and J W

Considering the 90-day investment horizon FirstService Corp is expected to under-perform the J W. But the stock apears to be less risky and, when comparing its historical volatility, FirstService Corp is 299.38 times less risky than J W. The stock trades about -0.07 of its potential returns per unit of risk. The J W Mays is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  4,609  in J W Mays on March 12, 2024 and sell it today you would lose (255.00) from holding J W Mays or give up 5.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.43%
Values	Daily Returns

FirstService Corp  vs.  J W Mays

FirstService Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FirstService Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

J W Mays

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days J W Mays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent basic indicators, J W unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FirstService Corp and J W

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

The idea behind FirstService Corp and J W Mays 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.