Correlation Between CBL Associates and Re Max

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

By analyzing existing cross correlation between CBL Associates Properties and Re Max Holding, you can compare the effects of market volatilities on CBL Associates and Re Max 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 CBL Associates with a short position of Re Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL Associates and Re Max.

Diversification Opportunities for CBL Associates and Re Max

0.23

Correlation Coefficient

CBL Associates  Re Max

Modest diversification

The 3 months correlation between CBL and RMAX is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CBL Associates Properties and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding and CBL Associates 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 CBL Associates Properties are associated (or correlated) with Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of CBL Associates i.e., CBL Associates and Re Max go up and down completely randomly.

Pair Corralation between CBL Associates and Re Max

Considering the 90-day investment horizon CBL Associates Properties is expected to generate 0.66 times more return on investment than Re Max. However, CBL Associates Properties is 1.51 times less risky than Re Max. It trades about -0.06 of its potential returns per unit of risk. Re Max Holding is currently generating about -0.11 per unit of risk. If you would invest  2,898  in CBL Associates Properties on December 26, 2024 and sell it today you would lose (198.00) from holding CBL Associates Properties or give up 6.83% of portfolio value over 90 days.

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

CBL Associates Properties  vs.  Re Max Holding

CBL Associates Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBL Associates Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, CBL Associates is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Re Max Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Re Max Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CBL Associates and Re Max

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

The idea behind CBL Associates Properties and Re Max Holding 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.