Correlation Between Credit Corp and Lendlease
Can any of the company-specific risk be diversified away by investing in both Credit Corp 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 Credit Corp and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Corp Group and Lendlease Group, you can compare the effects of market volatilities on Credit Corp 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 Credit Corp with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Corp and Lendlease.
Diversification Opportunities for Credit Corp and Lendlease
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Credit and Lendlease is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Credit Corp Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Credit Corp 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 Credit Corp 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 Credit Corp i.e., Credit Corp and Lendlease go up and down completely randomly.
Pair Corralation between Credit Corp and Lendlease
Assuming the 90 days trading horizon Credit Corp Group is expected to generate 1.47 times more return on investment than Lendlease. However, Credit Corp is 1.47 times more volatile than Lendlease Group. It trades about 0.01 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest 1,653 in Credit Corp Group on November 28, 2024 and sell it today you would lose (75.00) from holding Credit Corp Group or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Credit Corp Group vs. Lendlease Group
Performance |
| Timeline |
| Credit Corp Group |
| Lendlease Group |
Credit Corp and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Corp and Lendlease
The main advantage of trading using opposite Credit Corp and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Corp 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.| Credit Corp vs. Westpac Banking | Credit Corp vs. TPG Telecom | Credit Corp vs. Computershare | Credit Corp vs. Treasury Wine Estates |
| Lendlease vs. Navigator Global Investments | Lendlease vs. BKI Investment | Lendlease vs. Group 6 Metals | Lendlease vs. Polymetals Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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