Correlation Between CBRE Group and Newmark

Can any of the company-specific risk be diversified away by investing in both CBRE Group and Newmark 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 Newmark 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 Newmark Group, you can compare the effects of market volatilities on CBRE Group and Newmark 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 Newmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBRE Group and Newmark.

Diversification Opportunities for CBRE Group and Newmark

0.92

Correlation Coefficient

CBRE Group  Newmark

Almost no diversification

The 3 months correlation between CBRE and Newmark is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Newmark Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmark Group 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 Newmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmark Group has no effect on the direction of CBRE Group i.e., CBRE Group and Newmark go up and down completely randomly.

Pair Corralation between CBRE Group and Newmark

Given the investment horizon of 90 days CBRE Group Class is expected to generate 0.75 times more return on investment than Newmark. However, CBRE Group Class is 1.33 times less risky than Newmark. It trades about -0.06 of its potential returns per unit of risk. Newmark Group is currently generating about -0.11 per unit of risk. If you would invest  14,062  in CBRE Group Class on March 3, 2025 and sell it today you would lose (1,560) from holding CBRE Group Class or give up 11.09% of portfolio value over 90 days.

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

CBRE Group Class  vs.  Newmark Group

CBRE Group Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBRE Group Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Newmark Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CBRE Group and Newmark

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

The idea behind CBRE Group Class and Newmark Group 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.