Correlation Between Newmark and Adler Group
Can any of the company-specific risk be diversified away by investing in both Newmark and Adler Group 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 Newmark and Adler Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmark Group and Adler Group SA, you can compare the effects of market volatilities on Newmark and Adler Group 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 Newmark with a short position of Adler Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and Adler Group.
Diversification Opportunities for Newmark and Adler Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newmark and Adler is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and Adler Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adler Group SA and Newmark 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 Newmark Group are associated (or correlated) with Adler Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adler Group SA has no effect on the direction of Newmark i.e., Newmark and Adler Group go up and down completely randomly.
Pair Corralation between Newmark and Adler Group
Given the investment horizon of 90 days Newmark Group is expected to generate 0.73 times more return on investment than Adler Group. However, Newmark Group is 1.37 times less risky than Adler Group. It trades about 0.06 of its potential returns per unit of risk. Adler Group SA is currently generating about -0.07 per unit of risk. If you would invest 852.00 in Newmark Group on August 2, 2024 and sell it today you would earn a total of 652.00 from holding Newmark Group or generate 76.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Newmark Group vs. Adler Group SA
Performance |
Timeline |
Newmark Group |
Adler Group SA |
Newmark and Adler Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Newmark and Adler Group
The main advantage of trading using opposite Newmark and Adler Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmark position performs unexpectedly, Adler Group 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 Adler Group will offset losses from the drop in Adler Group's long position.Newmark vs. Jones Lang LaSalle | Newmark vs. CBRE Group Class | Newmark vs. Colliers International Group | Newmark vs. Marcus Millichap |
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Check out your portfolio center.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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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