Correlation Between CBRE Group and New England
Can any of the company-specific risk be diversified away by investing in both CBRE Group and New England 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 New England 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 New England Realty, you can compare the effects of market volatilities on CBRE Group and New England 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 New England. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and New England.
Diversification Opportunities for CBRE Group and New England
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBRE and New is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and New England Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New England Realty 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 New England. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New England Realty has no effect on the direction of CBRE Group i.e., CBRE Group and New England go up and down completely randomly.
Pair Corralation between CBRE Group and New England
Given the investment horizon of 90 days CBRE Group is expected to generate 21.6 times less return on investment than New England. But when comparing it to its historical volatility, CBRE Group Class is 31.2 times less risky than New England. It trades about 0.07 of its potential returns per unit of risk. New England Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,679 in New England Realty on August 27, 2024 and sell it today you would earn a total of 1,570 from holding New England Realty or generate 23.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 67.74% |
| Values | Daily Returns |
CBRE Group Class vs. New England Realty
Performance |
| Timeline |
| CBRE Group Class |
| New England Realty |
CBRE Group and New England Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBRE Group and New England
The main advantage of trading using opposite CBRE Group and New England positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBRE Group position performs unexpectedly, New England 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 New England will offset losses from the drop in New England'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 |
| New England vs. The Intergroup | New England vs. Transcontinental Realty Investors | New England vs. American Realty Investors | New England vs. Gyrodyne Company of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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