Correlation Between Liberty All and Cbre Clarion

Can any of the company-specific risk be diversified away by investing in both Liberty All and Cbre Clarion 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 Liberty All and Cbre Clarion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Liberty All Star and Cbre Clarion Global, you can compare the effects of market volatilities on Liberty All and Cbre Clarion 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 Liberty All with a short position of Cbre Clarion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty All and Cbre Clarion.

Diversification Opportunities for Liberty All and Cbre Clarion

0.06

Correlation Coefficient

Liberty All  Cbre Clarion

Significant diversification

The 3 months correlation between Liberty and Cbre is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star and Cbre Clarion Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cbre Clarion Global and Liberty All 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 Liberty All Star are associated (or correlated) with Cbre Clarion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cbre Clarion Global has no effect on the direction of Liberty All i.e., Liberty All and Cbre Clarion go up and down completely randomly.

Pair Corralation between Liberty All and Cbre Clarion

Considering the 90-day investment horizon Liberty All Star is expected to under-perform the Cbre Clarion. But the fund apears to be less risky and, when comparing its historical volatility, Liberty All Star is 1.18 times less risky than Cbre Clarion. The fund trades about -0.04 of its potential returns per unit of risk. The Cbre Clarion Global is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  480.00  in Cbre Clarion Global on December 27, 2024 and sell it today you would earn a total of  35.00  from holding Cbre Clarion Global or generate 7.29% return on investment over 90 days.

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

Liberty All Star  vs.  Cbre Clarion Global

Liberty All Star

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty All Star has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Liberty All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cbre Clarion Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cbre Clarion Global are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Cbre Clarion may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Liberty All and Cbre Clarion

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

The idea behind Liberty All Star and Cbre Clarion Global 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.