Correlation Between CBRE Group and Cushman Wakefield
Can any of the company-specific risk be diversified away by investing in both CBRE Group and Cushman Wakefield 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 CBRE Group and Cushman Wakefield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBRE Group Class and Cushman Wakefield plc, you can compare the effects of market volatilities on CBRE Group and Cushman Wakefield 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 CBRE Group with a short position of Cushman Wakefield. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and Cushman Wakefield.
Diversification Opportunities for CBRE Group and Cushman Wakefield
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBRE and Cushman is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Cushman Wakefield plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushman Wakefield plc and CBRE Group 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 CBRE Group Class are associated (or correlated) with Cushman Wakefield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushman Wakefield plc has no effect on the direction of CBRE Group i.e., CBRE Group and Cushman Wakefield go up and down completely randomly.
Pair Corralation between CBRE Group and Cushman Wakefield
Given the investment horizon of 90 days CBRE Group Class is expected to generate 0.67 times more return on investment than Cushman Wakefield. However, CBRE Group Class is 1.48 times less risky than Cushman Wakefield. It trades about 0.2 of its potential returns per unit of risk. Cushman Wakefield plc is currently generating about 0.1 per unit of risk. If you would invest 8,676 in CBRE Group Class on August 24, 2024 and sell it today you would earn a total of 4,489 from holding CBRE Group Class or generate 51.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBRE Group Class vs. Cushman Wakefield plc
Performance |
| Timeline |
| CBRE Group Class |
| Cushman Wakefield plc |
CBRE Group and Cushman Wakefield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBRE Group and Cushman Wakefield
The main advantage of trading using opposite CBRE Group and Cushman Wakefield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBRE Group position performs unexpectedly, Cushman Wakefield 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 Cushman Wakefield will offset losses from the drop in Cushman Wakefield's long position.| CBRE Group vs. Cushman Wakefield plc | CBRE Group vs. Newmark Group | CBRE Group vs. Colliers International Group | CBRE Group vs. Marcus Millichap |
| Cushman Wakefield vs. CBRE Group Class | Cushman Wakefield vs. Newmark Group | Cushman Wakefield vs. Colliers International Group | Cushman Wakefield vs. Marcus Millichap |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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