Correlation Between Colliers International and Badger Infrastructure

Can any of the company-specific risk be diversified away by investing in both Colliers International and Badger Infrastructure 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 Badger Infrastructure 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 Badger Infrastructure Solutions, you can compare the effects of market volatilities on Colliers International and Badger Infrastructure 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 Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colliers International and Badger Infrastructure.

Diversification Opportunities for Colliers International and Badger Infrastructure

0.3

Correlation Coefficient

Colliers International  Badger Infrastructure

Weak diversification

The 3 months correlation between Colliers and Badger is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Colliers International Group and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure 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 Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Colliers International i.e., Colliers International and Badger Infrastructure go up and down completely randomly.

Pair Corralation between Colliers International and Badger Infrastructure

Assuming the 90 days trading horizon Colliers International Group is expected to under-perform the Badger Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, Colliers International Group is 1.43 times less risky than Badger Infrastructure. The stock trades about -0.05 of its potential returns per unit of risk. The Badger Infrastructure Solutions is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,677  in Badger Infrastructure Solutions on September 30, 2024 and sell it today you would lose (34.00) from holding Badger Infrastructure Solutions or give up 0.92% of portfolio value over 90 days.

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

Colliers International Group  vs.  Badger Infrastructure Solution

Colliers International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Badger Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Badger Infrastructure Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Badger Infrastructure 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 Badger Infrastructure

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

The idea behind Colliers International Group and Badger Infrastructure Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.