Correlation Between Cushman Wakefield and Vonovia SE

Can any of the company-specific risk be diversified away by investing in both Cushman Wakefield 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 Cushman Wakefield and Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cushman Wakefield plc and Vonovia SE ADR, you can compare the effects of market volatilities on Cushman Wakefield 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 Cushman Wakefield with a short position of Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cushman Wakefield and Vonovia SE.

Diversification Opportunities for Cushman Wakefield and Vonovia SE

-0.62

Correlation Coefficient

Cushman Wakefield  Vonovia SE

Excellent diversification

The 3 months correlation between Cushman and Vonovia is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cushman Wakefield plc and Vonovia SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE ADR and Cushman Wakefield 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 Cushman Wakefield plc 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 ADR has no effect on the direction of Cushman Wakefield i.e., Cushman Wakefield and Vonovia SE go up and down completely randomly.

Pair Corralation between Cushman Wakefield and Vonovia SE

Considering the 90-day investment horizon Cushman Wakefield plc is expected to generate 1.84 times more return on investment than Vonovia SE. However, Cushman Wakefield is 1.84 times more volatile than Vonovia SE ADR. It trades about 0.12 of its potential returns per unit of risk. Vonovia SE ADR is currently generating about -0.1 per unit of risk. If you would invest  1,267  in Cushman Wakefield plc on September 5, 2024 and sell it today you would earn a total of  253.00  from holding Cushman Wakefield plc or generate 19.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Cushman Wakefield plc  vs.  Vonovia SE ADR

Cushman Wakefield plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cushman Wakefield plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Cushman Wakefield disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vonovia SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vonovia SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Cushman Wakefield and Vonovia SE

The main advantage of trading using opposite Cushman Wakefield and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cushman Wakefield 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.

The idea behind Cushman Wakefield plc and Vonovia SE ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.