Correlation Between Newmark and CoStar
Can any of the company-specific risk be diversified away by investing in both Newmark and CoStar 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 Newmark and CoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and CoStar Group, you can compare the effects of market volatilities on Newmark and CoStar 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 Newmark with a short position of CoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and CoStar.
Diversification Opportunities for Newmark and CoStar
Very poor diversification
The 3 months correlation between Newmark and CoStar is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group and Newmark 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 Newmark Group are associated (or correlated) with CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Newmark i.e., Newmark and CoStar go up and down completely randomly.
Pair Corralation between Newmark and CoStar
Given the investment horizon of 90 days Newmark Group is expected to generate 1.21 times more return on investment than CoStar. However, Newmark is 1.21 times more volatile than CoStar Group. It trades about 0.08 of its potential returns per unit of risk. CoStar Group is currently generating about -0.01 per unit of risk. If you would invest 983.00 in Newmark Group on November 3, 2024 and sell it today you would earn a total of 430.00 from holding Newmark Group or generate 43.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmark Group vs. CoStar Group
Performance |
| Timeline |
| Newmark Group |
| CoStar Group |
Newmark and CoStar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and CoStar
The main advantage of trading using opposite Newmark and CoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, CoStar 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 CoStar will offset losses from the drop in CoStar's long position.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| CoStar vs. Jones Lang LaSalle | CoStar vs. Cushman Wakefield plc | CoStar vs. Colliers International Group | CoStar vs. Newmark Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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