Correlation Between SWISS WATER and Lendlease
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Lendlease Group, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Lendlease.
Diversification Opportunities for SWISS WATER and Lendlease
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SWISS and Lendlease is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and Lendlease go up and down completely randomly.
Pair Corralation between SWISS WATER and Lendlease
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to generate 1.16 times more return on investment than Lendlease. However, SWISS WATER is 1.16 times more volatile than Lendlease Group. It trades about 0.04 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.02 per unit of risk. If you would invest 202.00 in SWISS WATER DECAFFCOFFEE on September 1, 2024 and sell it today you would earn a total of 66.00 from holding SWISS WATER DECAFFCOFFEE or generate 32.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Lendlease Group
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Lendlease Group |
SWISS WATER and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Lendlease
The main advantage of trading using opposite SWISS WATER and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. RCM TECHNOLOGIES | SWISS WATER vs. Reinsurance Group of | SWISS WATER vs. REVO INSURANCE SPA | SWISS WATER vs. Insurance Australia Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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