Correlation Between Vonovia SE and Colliers International

Can any of the company-specific risk be diversified away by investing in both Vonovia SE and Colliers International 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 Vonovia SE and Colliers International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vonovia SE ADR and Colliers International Group, you can compare the effects of market volatilities on Vonovia SE and Colliers International 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 Vonovia SE with a short position of Colliers International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vonovia SE and Colliers International.

Diversification Opportunities for Vonovia SE and Colliers International

-0.15

Correlation Coefficient

Vonovia SE  Colliers International

Good diversification

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

Pair Corralation between Vonovia SE and Colliers International

Assuming the 90 days horizon Vonovia SE ADR is expected to under-perform the Colliers International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Vonovia SE ADR is 1.04 times less risky than Colliers International. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Colliers International Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  14,017  in Colliers International Group on September 5, 2024 and sell it today you would earn a total of  1,237  from holding Colliers International Group or generate 8.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Vonovia SE ADR  vs.  Colliers International Group

Vonovia SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vonovia SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Colliers International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Colliers International Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, Colliers International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vonovia SE and Colliers International

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

The idea behind Vonovia SE ADR and Colliers International Group 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.