Correlation Between Alset Ehome and CBRE Group

Can any of the company-specific risk be diversified away by investing in both Alset Ehome 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 Alset Ehome and CBRE Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alset Ehome International and CBRE Group Class, you can compare the effects of market volatilities on Alset Ehome 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 Alset Ehome with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alset Ehome and CBRE Group.

Diversification Opportunities for Alset Ehome and CBRE Group

0.33

Correlation Coefficient

Alset Ehome  CBRE Group

Weak diversification

The 3 months correlation between Alset and CBRE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International 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 Alset Ehome 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 Alset Ehome International 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 Alset Ehome i.e., Alset Ehome and CBRE Group go up and down completely randomly.

Pair Corralation between Alset Ehome and CBRE Group

Considering the 90-day investment horizon Alset Ehome International is expected to under-perform the CBRE Group. In addition to that, Alset Ehome is 3.19 times more volatile than CBRE Group Class. It trades about -0.38 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.06 per unit of volatility. If you would invest  8,699  in CBRE Group Class on February 14, 2024 and sell it today you would earn a total of  114.00  from holding CBRE Group Class or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alset Ehome International  vs.  CBRE Group Class

Alset Ehome International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alset Ehome International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

CBRE Group Class

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CBRE Group is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Alset Ehome and CBRE Group

The main advantage of trading using opposite Alset Ehome and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alset Ehome 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.

The idea behind Alset Ehome International and CBRE Group Class 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.