Correlation Between Xinyuan Real and Cushman Wakefield
Can any of the company-specific risk be diversified away by investing in both Xinyuan Real and Cushman Wakefield 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 Xinyuan Real and Cushman Wakefield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinyuan Real Estate and Cushman Wakefield plc, you can compare the effects of market volatilities on Xinyuan Real and Cushman Wakefield 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 Xinyuan Real with a short position of Cushman Wakefield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinyuan Real and Cushman Wakefield.
Diversification Opportunities for Xinyuan Real and Cushman Wakefield
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinyuan and Cushman is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xinyuan Real Estate and Cushman Wakefield plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushman Wakefield plc and Xinyuan Real 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 Xinyuan Real Estate are associated (or correlated) with Cushman Wakefield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushman Wakefield plc has no effect on the direction of Xinyuan Real i.e., Xinyuan Real and Cushman Wakefield go up and down completely randomly.
Pair Corralation between Xinyuan Real and Cushman Wakefield
Considering the 90-day investment horizon Xinyuan Real Estate is expected to under-perform the Cushman Wakefield. But the stock apears to be less risky and, when comparing its historical volatility, Xinyuan Real Estate is 1.23 times less risky than Cushman Wakefield. The stock trades about -0.14 of its potential returns per unit of risk. The Cushman Wakefield plc is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 992.00 in Cushman Wakefield plc on January 20, 2024 and sell it today you would lose (59.00) from holding Cushman Wakefield plc or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinyuan Real Estate vs. Cushman Wakefield plc
Performance |
| Timeline |
| Xinyuan Real Estate |
| Cushman Wakefield plc |
Xinyuan Real and Cushman Wakefield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinyuan Real and Cushman Wakefield
The main advantage of trading using opposite Xinyuan Real and Cushman Wakefield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinyuan Real position performs unexpectedly, Cushman Wakefield 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 Cushman Wakefield will offset losses from the drop in Cushman Wakefield's long position.| Xinyuan Real vs. AMREP | Xinyuan Real vs. Alset Ehome International | Xinyuan Real vs. Landsea Homes Corp | Xinyuan Real vs. Bayport International Holdings |
| Cushman Wakefield vs. CBRE Group Class | Cushman Wakefield vs. Newmark Group | Cushman Wakefield vs. Colliers International Group | Cushman Wakefield vs. Marcus Millichap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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