Correlation Between BKI Investment and Lendlease
Can any of the company-specific risk be diversified away by investing in both BKI Investment 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 BKI Investment and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Lendlease Group, you can compare the effects of market volatilities on BKI Investment 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 BKI Investment with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Lendlease.
Diversification Opportunities for BKI Investment and Lendlease
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BKI and Lendlease is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and BKI Investment 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 BKI 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 BKI Investment i.e., BKI Investment and Lendlease go up and down completely randomly.
Pair Corralation between BKI Investment and Lendlease
Assuming the 90 days trading horizon BKI Investment is expected to generate 8.55 times less return on investment than Lendlease. But when comparing it to its historical volatility, BKI Investment is 2.48 times less risky than Lendlease. It trades about 0.05 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 676.00 in Lendlease Group on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Lendlease Group or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Lendlease Group
Performance |
| Timeline |
| BKI Investment |
| Lendlease Group |
BKI Investment and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Lendlease
The main advantage of trading using opposite BKI Investment and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment 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.| BKI Investment vs. Clime Investment Management | BKI Investment vs. Bailador Technology Invest | BKI Investment vs. Hudson Investment Group | BKI Investment vs. Macquarie Technology Group |
| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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