Correlation Between Fiera Capital and Timbercreek Financial

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Can any of the company-specific risk be diversified away by investing in both Fiera Capital and Timbercreek Financial 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 Fiera Capital and Timbercreek Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiera Capital and Timbercreek Financial Corp, you can compare the effects of market volatilities on Fiera Capital and Timbercreek Financial 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 Fiera Capital with a short position of Timbercreek Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiera Capital and Timbercreek Financial.

Diversification Opportunities for Fiera Capital and Timbercreek Financial

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between Fiera and Timbercreek is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fiera Capital and Timbercreek Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timbercreek Financial and Fiera Capital 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 Fiera Capital are associated (or correlated) with Timbercreek Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timbercreek Financial has no effect on the direction of Fiera Capital i.e., Fiera Capital and Timbercreek Financial go up and down completely randomly.

Pair Corralation between Fiera Capital and Timbercreek Financial

Assuming the 90 days trading horizon Fiera Capital is expected to generate 1.14 times more return on investment than Timbercreek Financial. However, Fiera Capital is 1.14 times more volatile than Timbercreek Financial Corp. It trades about -0.1 of its potential returns per unit of risk. Timbercreek Financial Corp is currently generating about -0.12 per unit of risk. If you would invest  673.00  in Fiera Capital on August 29, 2025 and sell it today you would lose (61.00) from holding Fiera Capital or give up 9.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Fiera Capital  vs.  Timbercreek Financial Corp

 Performance 
       Timeline  
Fiera Capital 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Fiera Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Timbercreek Financial 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Timbercreek Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Fiera Capital and Timbercreek Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fiera Capital and Timbercreek Financial

The main advantage of trading using opposite Fiera Capital and Timbercreek Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiera Capital position performs unexpectedly, Timbercreek Financial 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 Timbercreek Financial will offset losses from the drop in Timbercreek Financial's long position.
The idea behind Fiera Capital and Timbercreek Financial Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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