Correlation Between J W and Cushman Wakefield

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

By analyzing existing cross correlation between J W Mays and Cushman Wakefield plc, you can compare the effects of market volatilities on J W and Cushman Wakefield 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 J W with a short position of Cushman Wakefield. Check out your portfolio center. Please also check ongoing floating volatility patterns of J W and Cushman Wakefield.

Diversification Opportunities for J W and Cushman Wakefield

0.8

Correlation Coefficient

J W  Cushman Wakefield

Very poor diversification

The 3 months correlation between MAYS and Cushman is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding J W Mays and Cushman Wakefield plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cushman Wakefield plc and J W 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 J W Mays are associated (or correlated) with Cushman Wakefield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cushman Wakefield plc has no effect on the direction of J W i.e., J W and Cushman Wakefield go up and down completely randomly.

Pair Corralation between J W and Cushman Wakefield

Given the investment horizon of 90 days J W Mays is expected to under-perform the Cushman Wakefield. But the stock apears to be less risky and, when comparing its historical volatility, J W Mays is 1.01 times less risky than Cushman Wakefield. The stock trades about -0.17 of its potential returns per unit of risk. The Cushman Wakefield plc is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,302  in Cushman Wakefield plc on December 28, 2024 and sell it today you would lose (255.00) from holding Cushman Wakefield plc or give up 19.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	55.0%
Values	Daily Returns

J W Mays  vs.  Cushman Wakefield plc

J W Mays

Risk-Adjusted Performance

Very Weak

Over the last 90 days J W Mays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cushman Wakefield plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cushman Wakefield plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with J W and Cushman Wakefield

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

The idea behind J W Mays and Cushman Wakefield plc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.