Correlation Between VONOVIA SE and CBRE Group
Can any of the company-specific risk be diversified away by investing in both VONOVIA SE 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 VONOVIA SE and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VONOVIA SE ADR and CBRE Group Class, you can compare the effects of market volatilities on VONOVIA SE 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 VONOVIA SE with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VONOVIA SE and CBRE Group.
Diversification Opportunities for VONOVIA SE and CBRE Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VONOVIA and CBRE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding VONOVIA SE ADR 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 VONOVIA SE 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 VONOVIA SE ADR 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 VONOVIA SE i.e., VONOVIA SE and CBRE Group go up and down completely randomly.
Pair Corralation between VONOVIA SE and CBRE Group
Assuming the 90 days trading horizon VONOVIA SE ADR is expected to under-perform the CBRE Group. But the stock apears to be less risky and, when comparing its historical volatility, VONOVIA SE ADR is 1.14 times less risky than CBRE Group. The stock trades about -0.09 of its potential returns per unit of risk. The CBRE Group Class is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10,900 in CBRE Group Class on September 24, 2024 and sell it today you would earn a total of 1,200 from holding CBRE Group Class or generate 11.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
VONOVIA SE ADR vs. CBRE Group Class
Performance |
Timeline |
VONOVIA SE ADR |
CBRE Group Class |
VONOVIA SE and CBRE Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VONOVIA SE and CBRE Group
The main advantage of trading using opposite VONOVIA SE and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VONOVIA SE 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.VONOVIA SE vs. COSTAR GROUP INC | VONOVIA SE vs. CBRE Group Class | VONOVIA SE vs. Vonovia SE | VONOVIA SE vs. Vonovia SE |
CBRE Group vs. COSTAR GROUP INC | CBRE Group vs. VONOVIA SE ADR | CBRE Group vs. Vonovia SE | CBRE Group vs. Vonovia SE |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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