Correlation Between Bank of Queensland and Lendlease
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland 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 Bank of Queensland and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Lendlease Group, you can compare the effects of market volatilities on Bank of Queensland 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 Bank of Queensland with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Lendlease.
Diversification Opportunities for Bank of Queensland and Lendlease
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Lendlease is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Bank of Queensland 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 Bank of Queensland 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 Bank of Queensland i.e., Bank of Queensland and Lendlease go up and down completely randomly.
Pair Corralation between Bank of Queensland and Lendlease
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 1.63 times less return on investment than Lendlease. But when comparing it to its historical volatility, Bank of Queensland is 1.79 times less risky than Lendlease. It trades about 0.05 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 664.00 in Lendlease Group on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Lendlease Group or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Queensland vs. Lendlease Group
Performance |
| Timeline |
| Bank of Queensland |
| Lendlease Group |
Bank of Queensland and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Queensland and Lendlease
The main advantage of trading using opposite Bank of Queensland and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland 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.| Bank of Queensland vs. Champion Iron | Bank of Queensland vs. Ridley | Bank of Queensland vs. Peel Mining | Bank of Queensland 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |