Correlation Between Australian Strategic and Lendlease
Can any of the company-specific risk be diversified away by investing in both Australian Strategic 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 Australian Strategic and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Strategic Materials and Lendlease Group, you can compare the effects of market volatilities on Australian Strategic 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 Australian Strategic with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Strategic and Lendlease.
Diversification Opportunities for Australian Strategic and Lendlease
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Australian and Lendlease is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Australian Strategic Materials and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Australian Strategic 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 Australian Strategic Materials 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 Australian Strategic i.e., Australian Strategic and Lendlease go up and down completely randomly.
Pair Corralation between Australian Strategic and Lendlease
Assuming the 90 days trading horizon Australian Strategic Materials is expected to under-perform the Lendlease. In addition to that, Australian Strategic is 2.27 times more volatile than Lendlease Group. It trades about -0.07 of its total potential returns per unit of risk. Lendlease Group is currently generating about -0.1 per unit of volatility. If you would invest 685.00 in Lendlease Group on October 14, 2024 and sell it today you would lose (69.00) from holding Lendlease Group or give up 10.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Strategic Materials vs. Lendlease Group
Performance |
| Timeline |
| Australian Strategic |
| Lendlease Group |
Australian Strategic and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Strategic and Lendlease
The main advantage of trading using opposite Australian Strategic and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Strategic 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.| Australian Strategic vs. Global Health | Australian Strategic vs. Mirrabooka Investments | Australian Strategic vs. Carlton Investments | Australian Strategic vs. Oneview Healthcare PLC |
| Lendlease vs. Sports Entertainment Group | Lendlease vs. Australian Strategic Materials | Lendlease vs. Kneomedia | Lendlease vs. Land Homes 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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