Correlation Between CBRE Group and Maui Land

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

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

Diversification Opportunities for CBRE Group and Maui Land

-0.16

Correlation Coefficient

CBRE Group  Maui Land

Good diversification

The 3 months correlation between CBRE and Maui is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple and CBRE Group 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 CBRE Group Class are associated (or correlated) with Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of CBRE Group i.e., CBRE Group and Maui Land go up and down completely randomly.

Pair Corralation between CBRE Group and Maui Land

Given the investment horizon of 90 days CBRE Group Class is expected to under-perform the Maui Land. But the stock apears to be less risky and, when comparing its historical volatility, CBRE Group Class is 1.23 times less risky than Maui Land. The stock trades about -0.03 of its potential returns per unit of risk. The Maui Land Pineapple is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,001  in Maui Land Pineapple on November 29, 2024 and sell it today you would lose (6.00) from holding Maui Land Pineapple or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CBRE Group Class  vs.  Maui Land Pineapple

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.

Maui Land Pineapple

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maui Land Pineapple has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CBRE Group and Maui Land

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

The idea behind CBRE Group Class and Maui Land Pineapple 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.