Correlation Between Global Ship and Lendlease
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Lendlease Group, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Lendlease.
Diversification Opportunities for Global Ship and Lendlease
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Lendlease is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Lendlease go up and down completely randomly.
Pair Corralation between Global Ship and Lendlease
Assuming the 90 days horizon Global Ship Lease is expected to under-perform the Lendlease. In addition to that, Global Ship is 1.22 times more volatile than Lendlease Group. It trades about -0.02 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.06 per unit of volatility. If you would invest 400.00 in Lendlease Group on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Lendlease Group or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Lendlease Group
Performance |
| Timeline |
| Global Ship Lease |
| Lendlease Group |
Global Ship and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Lendlease
The main advantage of trading using opposite Global Ship and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. COSTCO WHOLESALE CDR | Global Ship vs. WisdomTree Investments | Global Ship vs. Apollo Investment Corp | Global Ship vs. Retail Estates NV |
| Lendlease vs. Singapore Telecommunications Limited | Lendlease vs. ANTA SPORTS PRODUCT | Lendlease vs. USWE SPORTS AB | Lendlease vs. Fukuyama Transporting Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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