Correlation Between Bendigo and Lendlease
Can any of the company-specific risk be diversified away by investing in both Bendigo 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 Bendigo and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bendigo and Adelaide and Lendlease Group, you can compare the effects of market volatilities on Bendigo 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 Bendigo with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bendigo and Lendlease.
Diversification Opportunities for Bendigo and Lendlease
Good diversification
The 3 months correlation between Bendigo and Lendlease is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bendigo and Adelaide and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Bendigo 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 Bendigo and Adelaide 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 Bendigo i.e., Bendigo and Lendlease go up and down completely randomly.
Pair Corralation between Bendigo and Lendlease
Assuming the 90 days trading horizon Bendigo is expected to generate 10.03 times less return on investment than Lendlease. But when comparing it to its historical volatility, Bendigo and Adelaide is 3.47 times less risky than Lendlease. It trades about 0.02 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Lendlease Group on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Lendlease Group or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bendigo and Adelaide vs. Lendlease Group
Performance |
| Timeline |
| Bendigo and Adelaide |
| Lendlease Group |
Bendigo and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bendigo and Lendlease
The main advantage of trading using opposite Bendigo and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bendigo 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.| Bendigo vs. Regal Funds Management | Bendigo vs. Diversified United Investment | Bendigo vs. Microequities Asset Management | Bendigo vs. Flagship Investments |
| Lendlease vs. Tombador Iron | Lendlease vs. Aeris Environmental | Lendlease vs. Bluescope Steel | Lendlease vs. National Storage REIT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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