Correlation Between Lion One and CBRE Group
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and CBRE Group Class, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and CBRE Group.
Diversification Opportunities for Lion One and CBRE Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and CBRE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and CBRE Group go up and down completely randomly.
Pair Corralation between Lion One and CBRE Group
Assuming the 90 days horizon Lion One Metals is expected to under-perform the CBRE Group. In addition to that, Lion One is 1.78 times more volatile than CBRE Group Class. It trades about -0.09 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.17 per unit of volatility. If you would invest 12,300 in CBRE Group Class on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding CBRE Group Class or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. CBRE Group Class
Performance |
| Timeline |
| Lion One Metals |
| CBRE Group Class |
Lion One and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and CBRE Group
The main advantage of trading using opposite Lion One and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. British American Tobacco | Lion One vs. GREENX METALS LTD | Lion One vs. Scandinavian Tobacco Group | Lion One vs. ADRIATIC METALS LS 013355 |
| CBRE Group vs. Rayonier Advanced Materials | CBRE Group vs. Plastic Omnium | CBRE Group vs. SERI INDUSTRIAL EO | CBRE Group vs. Lion One Metals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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