Correlation Between BSP Financial and Lendlease
Can any of the company-specific risk be diversified away by investing in both BSP Financial 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 BSP Financial and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSP Financial Group and Lendlease Group, you can compare the effects of market volatilities on BSP Financial 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 BSP Financial with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSP Financial and Lendlease.
Diversification Opportunities for BSP Financial and Lendlease
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BSP and Lendlease is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BSP Financial Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and BSP Financial 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 BSP Financial Group 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 BSP Financial i.e., BSP Financial and Lendlease go up and down completely randomly.
Pair Corralation between BSP Financial and Lendlease
Assuming the 90 days trading horizon BSP Financial Group is expected to generate 1.22 times more return on investment than Lendlease. However, BSP Financial is 1.22 times more volatile than Lendlease Group. It trades about 0.07 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.04 per unit of risk. If you would invest 610.00 in BSP Financial Group on August 29, 2024 and sell it today you would earn a total of 40.00 from holding BSP Financial Group or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSP Financial Group vs. Lendlease Group
Performance |
| Timeline |
| BSP Financial Group |
| Lendlease Group |
BSP Financial and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSP Financial and Lendlease
The main advantage of trading using opposite BSP Financial and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSP Financial 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.| BSP Financial vs. Champion Iron | BSP Financial vs. Ridley | BSP Financial vs. Peel Mining | BSP Financial vs. Australian Dairy Farms |
| Lendlease vs. Australian United Investment | Lendlease vs. Clime Investment Management | Lendlease vs. Mirrabooka Investments | Lendlease vs. Sandon Capital Investments |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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