Correlation Between CBRE Group and Metrospaces
Can any of the company-specific risk be diversified away by investing in both CBRE Group and Metrospaces 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 Metrospaces 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 Metrospaces, you can compare the effects of market volatilities on CBRE Group and Metrospaces 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 Metrospaces. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and Metrospaces.
Diversification Opportunities for CBRE Group and Metrospaces
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CBRE and Metrospaces is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Metrospaces in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrospaces 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 Metrospaces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrospaces has no effect on the direction of CBRE Group i.e., CBRE Group and Metrospaces go up and down completely randomly.
Pair Corralation between CBRE Group and Metrospaces
Given the investment horizon of 90 days CBRE Group is expected to generate 208.56 times less return on investment than Metrospaces. But when comparing it to its historical volatility, CBRE Group Class is 138.42 times less risky than Metrospaces. It trades about 0.15 of its potential returns per unit of risk. Metrospaces is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Metrospaces on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Metrospaces or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
CBRE Group Class vs. Metrospaces
Performance |
| Timeline |
| CBRE Group Class |
| Metrospaces |
CBRE Group and Metrospaces Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBRE Group and Metrospaces
The main advantage of trading using opposite CBRE Group and Metrospaces positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBRE Group position performs unexpectedly, Metrospaces 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 Metrospaces will offset losses from the drop in Metrospaces' long position.| CBRE Group vs. Cushman Wakefield plc | CBRE Group vs. Newmark Group | CBRE Group vs. Colliers International Group | CBRE Group vs. Marcus Millichap |
| Metrospaces vs. CBRE Group Class | Metrospaces vs. CoStar Group | Metrospaces vs. Cellnex Telecom SA | Metrospaces vs. Ke Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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