Correlation Between CBRE Group and Transcontinental

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

Diversification Opportunities for CBRE Group and Transcontinental

-0.26

Correlation Coefficient

CBRE Group  Transcontinental

Very good diversification

The 3 months correlation between CBRE and Transcontinental is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CBRE Group Class and Transcontinental Realty Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental Realty 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 Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental Realty has no effect on the direction of CBRE Group i.e., CBRE Group and Transcontinental go up and down completely randomly.

Pair Corralation between CBRE Group and Transcontinental

Given the investment horizon of 90 days CBRE Group Class is expected to under-perform the Transcontinental. In addition to that, CBRE Group is 1.03 times more volatile than Transcontinental Realty Investors. It trades about -0.11 of its total potential returns per unit of risk. Transcontinental Realty Investors is currently generating about 0.01 per unit of volatility. If you would invest  2,733  in Transcontinental Realty Investors on January 30, 2025 and sell it today you would earn a total of  2.00  from holding Transcontinental Realty Investors or generate 0.07% return on investment over 90 days.

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

CBRE Group Class  vs.  Transcontinental Realty Invest

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 conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Transcontinental Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transcontinental Realty Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Transcontinental is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CBRE Group and Transcontinental

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

The idea behind CBRE Group Class and Transcontinental Realty Investors 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 Stocks Directory module to find actively traded stocks across global markets.