Correlation Between Aztec Land and CBRE Group

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

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

Diversification Opportunities for Aztec Land and CBRE Group

0.14

Correlation Coefficient

Aztec Land  CBRE Group

Average diversification

The 3 months correlation between Aztec and CBRE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aztec Land Comb 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 Aztec Land 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 Aztec Land Comb 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 Aztec Land i.e., Aztec Land and CBRE Group go up and down completely randomly.

Pair Corralation between Aztec Land and CBRE Group

Assuming the 90 days horizon Aztec Land Comb is expected to generate 1.34 times more return on investment than CBRE Group. However, Aztec Land is 1.34 times more volatile than CBRE Group Class. It trades about 0.19 of its potential returns per unit of risk. CBRE Group Class is currently generating about 0.02 per unit of risk. If you would invest  83,000  in Aztec Land Comb on December 27, 2024 and sell it today you would earn a total of  27,000  from holding Aztec Land Comb or generate 32.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Aztec Land Comb  vs.  CBRE Group Class

Aztec Land Comb

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Land Comb are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Aztec Land showed solid returns over the last few months and may actually be approaching a breakup point.

CBRE Group Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 1 (%) 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 Aztec Land and CBRE Group

The main advantage of trading using opposite Aztec Land and CBRE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aztec Land 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 Aztec Land Comb 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.