Correlation Between Newmark and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both Newmark and Vonovia SE 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 Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and Vonovia SE, you can compare the effects of market volatilities on Newmark and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and Vonovia SE.
Diversification Opportunities for Newmark and Vonovia SE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newmark and Vonovia is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of Newmark i.e., Newmark and Vonovia SE go up and down completely randomly.
Pair Corralation between Newmark and Vonovia SE
Given the investment horizon of 90 days Newmark Group is expected to generate 0.76 times more return on investment than Vonovia SE. However, Newmark Group is 1.31 times less risky than Vonovia SE. It trades about 0.07 of its potential returns per unit of risk. Vonovia SE is currently generating about 0.03 per unit of risk. If you would invest 813.00 in Newmark Group on August 31, 2024 and sell it today you would earn a total of 750.00 from holding Newmark Group or generate 92.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.36% |
| Values | Daily Returns |
Newmark Group vs. Vonovia SE
Performance |
| Timeline |
| Newmark Group |
| Vonovia SE |
Newmark and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmark and Vonovia SE
The main advantage of trading using opposite Newmark and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
| Vonovia SE vs. Vonovia SE ADR | Vonovia SE vs. CBRE Group Class | Vonovia SE vs. Opendoor Technologies | Vonovia SE vs. Jones Lang LaSalle |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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