Correlation Between EXp World and CBRE Group
Can any of the company-specific risk be diversified away by investing in both EXp World 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 EXp World and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eXp World Holdings and CBRE Group Class, you can compare the effects of market volatilities on EXp World 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 EXp World with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXp World and CBRE Group.
Diversification Opportunities for EXp World and CBRE Group
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EXp and CBRE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding eXp World Holdings and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class and EXp World 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 eXp World Holdings 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 Class has no effect on the direction of EXp World i.e., EXp World and CBRE Group go up and down completely randomly.
Pair Corralation between EXp World and CBRE Group
Given the investment horizon of 90 days eXp World Holdings is expected to generate 1.97 times more return on investment than CBRE Group. However, EXp World is 1.97 times more volatile than CBRE Group Class. It trades about 0.12 of its potential returns per unit of risk. CBRE Group Class is currently generating about 0.17 per unit of risk. If you would invest 1,292 in eXp World Holdings on August 29, 2024 and sell it today you would earn a total of 116.00 from holding eXp World Holdings or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
eXp World Holdings vs. CBRE Group Class
Performance |
| Timeline |
| eXp World Holdings |
| CBRE Group Class |
EXp World and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXp World and CBRE Group
The main advantage of trading using opposite EXp World and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXp World 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 eXp World Holdings and CBRE Group Class 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.| CBRE Group vs. Cushman Wakefield plc | CBRE Group vs. Newmark Group | CBRE Group vs. Colliers International Group | CBRE Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |