Correlation Between Australian United and Lendlease
Can any of the company-specific risk be diversified away by investing in both Australian United 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 United and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian United Investment and Lendlease Group, you can compare the effects of market volatilities on Australian United 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 United with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian United and Lendlease.
Diversification Opportunities for Australian United and Lendlease
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Australian and Lendlease is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Australian United Investment and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Australian United 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 United Investment 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 United i.e., Australian United and Lendlease go up and down completely randomly.
Pair Corralation between Australian United and Lendlease
Assuming the 90 days trading horizon Australian United Investment is expected to generate 0.39 times more return on investment than Lendlease. However, Australian United Investment is 2.58 times less risky than Lendlease. It trades about 0.05 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.0 per unit of risk. If you would invest 923.00 in Australian United Investment on August 25, 2024 and sell it today you would earn a total of 173.00 from holding Australian United Investment or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian United Investment vs. Lendlease Group
Performance |
| Timeline |
| Australian United |
| Lendlease Group |
Australian United and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian United and Lendlease
The main advantage of trading using opposite Australian United and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian United 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 United vs. Metro Mining | Australian United vs. Super Retail Group | Australian United vs. Zoom2u Technologies | Australian United vs. Richmond Vanadium Technology |
| Lendlease vs. Hotel Property Investments | Lendlease vs. ACDC Metals | Lendlease vs. Stelar Metals | Lendlease vs. Alternative Investment Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |