Correlation Between Swire Properties and CBRE Group
Can any of the company-specific risk be diversified away by investing in both Swire Properties 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 Swire Properties and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Properties Limited and CBRE Group Class, you can compare the effects of market volatilities on Swire Properties 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 Swire Properties with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and CBRE Group.
Diversification Opportunities for Swire Properties and CBRE Group
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swire and CBRE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Swire Properties Limited 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 Swire Properties 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 Swire Properties Limited 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 Swire Properties i.e., Swire Properties and CBRE Group go up and down completely randomly.
Pair Corralation between Swire Properties and CBRE Group
Assuming the 90 days horizon Swire Properties is expected to generate 1.19 times less return on investment than CBRE Group. In addition to that, Swire Properties is 1.84 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 0.21 per unit of volatility. If you would invest 8,050 in CBRE Group Class on August 30, 2024 and sell it today you would earn a total of 5,250 from holding CBRE Group Class or generate 65.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swire Properties Limited vs. CBRE Group Class
Performance |
| Timeline |
| Swire Properties |
| CBRE Group Class |
Swire Properties and CBRE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Properties and CBRE Group
The main advantage of trading using opposite Swire Properties and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Properties 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.| Swire Properties vs. Vonovia SE | Swire Properties vs. Superior Plus Corp | Swire Properties vs. NMI Holdings | Swire Properties vs. SIVERS SEMICONDUCTORS AB |
| CBRE Group vs. Vonovia SE | CBRE Group vs. Superior Plus Corp | CBRE Group vs. NMI Holdings | CBRE Group vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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