Correlation Between ASTRA INTERNATIONAL and CBRE GROUP

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

Diversification Opportunities for ASTRA INTERNATIONAL and CBRE GROUP

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between ASTRA and CBRE is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and CBRE GROUP A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE GROUP A and ASTRA 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 ASTRA INTERNATIONAL are associated (or correlated) with CBRE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE GROUP A has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and CBRE GROUP go up and down completely randomly.

Pair Corralation between ASTRA INTERNATIONAL and CBRE GROUP

Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to under-perform the CBRE GROUP. In addition to that, ASTRA INTERNATIONAL is 1.1 times more volatile than CBRE GROUP A. It trades about -0.02 of its total potential returns per unit of risk. CBRE GROUP A is currently generating about 0.09 per unit of volatility. If you would invest  7,888  in CBRE GROUP A on September 12, 2024 and sell it today you would earn a total of  5,112  from holding CBRE GROUP A or generate 64.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

ASTRA INTERNATIONAL  vs.  CBRE GROUP A

 Performance 
       Timeline  
ASTRA INTERNATIONAL 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ASTRA INTERNATIONAL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ASTRA INTERNATIONAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.
CBRE GROUP A 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CBRE GROUP A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CBRE GROUP exhibited solid returns over the last few months and may actually be approaching a breakup point.

ASTRA INTERNATIONAL and CBRE GROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ASTRA INTERNATIONAL and CBRE GROUP

The main advantage of trading using opposite ASTRA INTERNATIONAL and CBRE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, CBRE GROUP 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 CBRE GROUP will offset losses from the drop in CBRE GROUP's long position.
The idea behind ASTRA INTERNATIONAL and CBRE GROUP A 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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