Correlation Between RETAIL FOOD and CBRE Group
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD 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 RETAIL FOOD and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and CBRE Group Class, you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and CBRE Group.
Diversification Opportunities for RETAIL FOOD and CBRE Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RETAIL and CBRE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP 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 RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and CBRE Group go up and down completely randomly.
Pair Corralation between RETAIL FOOD and CBRE Group
Assuming the 90 days trading horizon RETAIL FOOD is expected to generate 1.01 times less return on investment than CBRE Group. In addition to that, RETAIL FOOD is 1.23 times more volatile than CBRE Group Class. It trades about 0.2 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.25 per unit of volatility. If you would invest 11,900 in CBRE Group Class on September 3, 2024 and sell it today you would earn a total of 1,300 from holding CBRE Group Class or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. CBRE Group Class
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| CBRE Group Class |
RETAIL FOOD and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and CBRE Group
The main advantage of trading using opposite RETAIL FOOD and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| CBRE Group vs. Mobilezone Holding AG | CBRE Group vs. Citic Telecom International | CBRE Group vs. Burlington Stores | CBRE Group vs. T MOBILE INCDL 00001 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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