Correlation Between CBRE Group and Ricoh
Can any of the company-specific risk be diversified away by investing in both CBRE Group and Ricoh 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 CBRE Group and Ricoh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBRE Group Class and Ricoh Company, you can compare the effects of market volatilities on CBRE Group and Ricoh 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 CBRE Group with a short position of Ricoh. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and Ricoh.
Diversification Opportunities for CBRE Group and Ricoh
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CBRE and Ricoh is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Ricoh Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ricoh Company and CBRE Group 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 CBRE Group Class are associated (or correlated) with Ricoh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ricoh Company has no effect on the direction of CBRE Group i.e., CBRE Group and Ricoh go up and down completely randomly.
Pair Corralation between CBRE Group and Ricoh
Assuming the 90 days horizon CBRE Group Class is expected to generate 0.91 times more return on investment than Ricoh. However, CBRE Group Class is 1.1 times less risky than Ricoh. It trades about 0.2 of its potential returns per unit of risk. Ricoh Company is currently generating about 0.14 per unit of risk. If you would invest 12,100 in CBRE Group Class on September 1, 2024 and sell it today you would earn a total of 1,100 from holding CBRE Group Class or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBRE Group Class vs. Ricoh Company
Performance |
| Timeline |
| CBRE Group Class |
| Ricoh Company |
CBRE Group and Ricoh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBRE Group and Ricoh
The main advantage of trading using opposite CBRE Group and Ricoh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBRE Group position performs unexpectedly, Ricoh 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 Ricoh will offset losses from the drop in Ricoh's long position.| CBRE Group vs. RETAIL FOOD GROUP | CBRE Group vs. VARIOUS EATERIES LS | CBRE Group vs. ePlay Digital | CBRE Group vs. AIR PRODCHEMICALS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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