Correlation Between FirstService Corp and Maui Land

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

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

Diversification Opportunities for FirstService Corp and Maui Land

-0.15

Correlation Coefficient

FirstService Corp  Maui Land

Good diversification

The 3 months correlation between FirstService and Maui is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple 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 Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of FirstService Corp i.e., FirstService Corp and Maui Land go up and down completely randomly.

Pair Corralation between FirstService Corp and Maui Land

Considering the 90-day investment horizon FirstService Corp is expected to generate 0.32 times more return on investment than Maui Land. However, FirstService Corp is 3.1 times less risky than Maui Land. It trades about 0.14 of its potential returns per unit of risk. Maui Land Pineapple is currently generating about 0.01 per unit of risk. If you would invest  17,822  in FirstService Corp on September 2, 2024 and sell it today you would earn a total of  1,597  from holding FirstService Corp or generate 8.96% return on investment over 90 days.

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

FirstService Corp  vs.  Maui Land Pineapple

FirstService Corp

Risk-Adjusted Performance

10 of 100

OK

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 weak basic indicators, FirstService Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Maui Land Pineapple

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maui Land Pineapple has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Maui Land is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with FirstService Corp and Maui Land

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

The idea behind FirstService Corp and Maui Land Pineapple 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.