Correlation Between AUREA SA and CBRE Group

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

By analyzing existing cross correlation between AUREA SA INH and CBRE Group Class, you can compare the effects of market volatilities on AUREA SA and CBRE 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 AUREA SA with a short position of CBRE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUREA SA and CBRE Group.

Diversification Opportunities for AUREA SA and CBRE Group

0.68

Correlation Coefficient

AUREA SA  CBRE Group

Poor diversification

The 3 months correlation between AUREA and CBRE is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AUREA SA INH and CBRE Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE Group Class and AUREA SA 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 AUREA SA INH are associated (or correlated) with CBRE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE Group Class has no effect on the direction of AUREA SA i.e., AUREA SA and CBRE Group go up and down completely randomly.

Pair Corralation between AUREA SA and CBRE Group

Assuming the 90 days horizon AUREA SA is expected to generate 1.21 times less return on investment than CBRE Group. In addition to that, AUREA SA is 1.05 times more volatile than CBRE Group Class. It trades about 0.1 of its total potential returns per unit of risk. CBRE Group Class is currently generating about 0.13 per unit of volatility. If you would invest  10,400  in CBRE Group Class on April 23, 2025 and sell it today you would earn a total of  1,500  from holding CBRE Group Class or generate 14.42% return on investment over 90 days.

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

AUREA SA INH  vs.  CBRE Group Class

AUREA SA INH

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUREA SA INH are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AUREA SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CBRE Group Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBRE Group Class are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CBRE Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AUREA SA and CBRE Group

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

The idea behind AUREA SA INH and CBRE Group Class 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.