Correlation Between Aeris Environmental and Lendlease
Can any of the company-specific risk be diversified away by investing in both Aeris Environmental 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 Aeris Environmental and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeris Environmental and Lendlease Group, you can compare the effects of market volatilities on Aeris Environmental 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 Aeris Environmental with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and Lendlease.
Diversification Opportunities for Aeris Environmental and Lendlease
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeris and Lendlease is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Aeris Environmental 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 Aeris Environmental 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 Aeris Environmental i.e., Aeris Environmental and Lendlease go up and down completely randomly.
Pair Corralation between Aeris Environmental and Lendlease
Assuming the 90 days trading horizon Aeris Environmental is expected to generate 2.53 times more return on investment than Lendlease. However, Aeris Environmental is 2.53 times more volatile than Lendlease Group. It trades about 0.09 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.11 per unit of risk. If you would invest 6.40 in Aeris Environmental on September 1, 2024 and sell it today you would earn a total of 2.60 from holding Aeris Environmental or generate 40.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeris Environmental vs. Lendlease Group
Performance |
| Timeline |
| Aeris Environmental |
| Lendlease Group |
Aeris Environmental and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeris Environmental and Lendlease
The main advantage of trading using opposite Aeris Environmental and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Environmental 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.| Aeris Environmental vs. Healthco Healthcare and | Aeris Environmental vs. Health and Plant | Aeris Environmental vs. Charter Hall Retail | Aeris Environmental vs. Retail Food Group |
| Lendlease vs. Centaurus Metals | Lendlease vs. Truscott Mining Corp | Lendlease vs. Alto Metals | Lendlease vs. Actinogen Medical |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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