Correlation Between Cushman Wakefield and CoStar

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

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

Diversification Opportunities for Cushman Wakefield and CoStar

0.82

Correlation Coefficient

Cushman Wakefield  CoStar

Very poor diversification

The 3 months correlation between Cushman and CoStar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cushman Wakefield plc and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group and Cushman Wakefield 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 Cushman Wakefield plc are associated (or correlated) with CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Cushman Wakefield i.e., Cushman Wakefield and CoStar go up and down completely randomly.

Pair Corralation between Cushman Wakefield and CoStar

Considering the 90-day investment horizon Cushman Wakefield plc is expected to generate 1.6 times more return on investment than CoStar. However, Cushman Wakefield is 1.6 times more volatile than CoStar Group. It trades about 0.23 of its potential returns per unit of risk. CoStar Group is currently generating about 0.14 per unit of risk. If you would invest  1,055  in Cushman Wakefield plc on May 16, 2025 and sell it today you would earn a total of  443.00  from holding Cushman Wakefield plc or generate 41.99% return on investment over 90 days.

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

Cushman Wakefield plc  vs.  CoStar Group

Cushman Wakefield plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cushman Wakefield plc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Cushman Wakefield disclosed solid returns over the last few months and may actually be approaching a breakup point.

CoStar Group

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CoStar Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, CoStar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cushman Wakefield and CoStar

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

The idea behind Cushman Wakefield plc and CoStar 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.