Correlation Between Colliers International and CCL Industries

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

Diversification Opportunities for Colliers International and CCL Industries

0.32

Correlation Coefficient

Colliers International  CCL Industries

Weak diversification

The 3 months correlation between Colliers and CCL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Colliers International Group and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Colliers International i.e., Colliers International and CCL Industries go up and down completely randomly.

Pair Corralation between Colliers International and CCL Industries

Assuming the 90 days trading horizon Colliers International Group is expected to generate 1.32 times more return on investment than CCL Industries. However, Colliers International is 1.32 times more volatile than CCL Industries. It trades about 0.13 of its potential returns per unit of risk. CCL Industries is currently generating about 0.01 per unit of risk. If you would invest  19,090  in Colliers International Group on September 3, 2024 and sell it today you would earn a total of  2,375  from holding Colliers International Group or generate 12.44% return on investment over 90 days.

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

Colliers International Group  vs.  CCL Industries

Colliers International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Colliers International Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Colliers International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CCL Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CCL Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Colliers International and CCL Industries

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

The idea behind Colliers International Group and CCL Industries 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.