Correlation Between MEDICAL FACILITIES and Lendlease
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Lendlease 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 MEDICAL FACILITIES and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Lendlease Group, you can compare the effects of market volatilities on MEDICAL FACILITIES and Lendlease 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 MEDICAL FACILITIES with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Lendlease.
Diversification Opportunities for MEDICAL FACILITIES and Lendlease
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between MEDICAL and Lendlease is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Lendlease go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Lendlease
Assuming the 90 days horizon MEDICAL FACILITIES NEW is expected to generate 1.42 times more return on investment than Lendlease. However, MEDICAL FACILITIES is 1.42 times more volatile than Lendlease Group. It trades about 0.08 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest 519.00 in MEDICAL FACILITIES NEW on September 12, 2024 and sell it today you would earn a total of 501.00 from holding MEDICAL FACILITIES NEW or generate 96.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Lendlease Group
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Lendlease Group |
MEDICAL FACILITIES and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Lendlease
The main advantage of trading using opposite MEDICAL FACILITIES and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Universal Health Services | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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