Correlation Between HANG LUNG and CBRE

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

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

Diversification Opportunities for HANG LUNG and CBRE

-0.45
  Correlation Coefficient
HANG LUNG PROPERTIES
CBRE Group

Very good diversification

The 3 months correlation between HLPPF and CBRE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding HANG LUNG PROPERTIES and CBRE Group in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group and HANG LUNG 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 HANG LUNG PROPERTIES are associated (or correlated) with CBRE. 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 has no effect on the direction of HANG LUNG i.e., HANG LUNG and CBRE go up and down completely randomly.

Pair Corralation between HANG LUNG and CBRE

Assuming the 90 days horizon HANG LUNG is expected to generate 1.21 times less return on investment than CBRE. In addition to that, HANG LUNG is 1.05 times more volatile than CBRE Group. It trades about 0.03 of its total potential returns per unit of risk. CBRE Group is currently generating about 0.04 per unit of volatility. If you would invest  9,736  in CBRE Group on August 31, 2021 and sell it today you would earn a total of  225.00  from holding CBRE Group or generate 2.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.67%
ValuesDaily Returns

HANG LUNG PROPERTIES  vs.  CBRE Group

 Performance (%) 
      Timeline 
HANG LUNG PROPERTIES 
HLPPF Performance
0 of 100
Over the last 90 days HANG LUNG PROPERTIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

HLPPF Price Channel

CBRE Group 
CBRE Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CBRE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

CBRE Price Channel

HANG LUNG and CBRE Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with HANG LUNG and CBRE

The main advantage of trading using opposite HANG LUNG and CBRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANG LUNG position performs unexpectedly, CBRE 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 will offset losses from the drop in CBRE's long position.

HANG LUNG PROPERTIES

Pair trading matchups for HANG LUNG

The idea behind HANG LUNG PROPERTIES and CBRE Group 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.

CBRE Group

Pair trading matchups for CBRE

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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