Correlation Between Hang Lung and CBRE Group
Can any of the company-specific risk be diversified away by investing in both Hang Lung 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 Hang Lung and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hang Lung Properties and CBRE Group Class, you can compare the effects of market volatilities on Hang Lung 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 Hang Lung with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hang Lung and CBRE Group.
Diversification Opportunities for Hang Lung and CBRE Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hang and CBRE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hang Lung Properties 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 Hang Lung 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 Hang Lung Properties 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 Hang Lung i.e., Hang Lung and CBRE Group go up and down completely randomly.
Pair Corralation between Hang Lung and CBRE Group
Assuming the 90 days horizon Hang Lung Properties is expected to under-perform the CBRE Group. In addition to that, Hang Lung is 1.43 times more volatile than CBRE Group Class. It trades about -0.04 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.08 per unit of volatility. If you would invest 7,568 in CBRE Group Class on September 12, 2024 and sell it today you would earn a total of 6,160 from holding CBRE Group Class or generate 81.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hang Lung Properties vs. CBRE Group Class
Performance |
| Timeline |
| Hang Lung Properties |
| CBRE Group Class |
Hang Lung and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hang Lung and CBRE Group
The main advantage of trading using opposite Hang Lung and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hang Lung 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.| Hang Lung vs. Asia Pptys | Hang Lung vs. Adler Group SA | Hang Lung vs. Aztec Land Comb | Hang Lung vs. Ambase Corp |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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