Correlation Between Re Max and Cushman Wakefield

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

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

Diversification Opportunities for Re Max and Cushman Wakefield

0.86

Correlation Coefficient

Re Max  Cushman Wakefield

Very poor diversification

The 3 months correlation between RMAX and Cushman is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Re Max Holding 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 Re Max 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 Re Max Holding 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 Re Max i.e., Re Max and Cushman Wakefield go up and down completely randomly.

Pair Corralation between Re Max and Cushman Wakefield

Given the investment horizon of 90 days Re Max Holding is expected to generate 1.13 times more return on investment than Cushman Wakefield. However, Re Max is 1.13 times more volatile than Cushman Wakefield plc. It trades about -0.1 of its potential returns per unit of risk. Cushman Wakefield plc is currently generating about -0.14 per unit of risk. If you would invest  1,077  in Re Max Holding on December 28, 2024 and sell it today you would lose (189.00) from holding Re Max Holding or give up 17.55% of portfolio value over 90 days.

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

Re Max Holding  vs.  Cushman Wakefield plc

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.

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 Re Max and Cushman Wakefield

The main advantage of trading using opposite Re Max and Cushman Wakefield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Re Max 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 Re Max Holding 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.