Correlation Between Carlton Investments and Lendlease
Can any of the company-specific risk be diversified away by investing in both Carlton Investments 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 Carlton Investments and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlton Investments and Lendlease Group, you can compare the effects of market volatilities on Carlton Investments 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 Carlton Investments with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and Lendlease.
Diversification Opportunities for Carlton Investments and Lendlease
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlton and Lendlease is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Carlton Investments 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 Carlton Investments 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 Carlton Investments i.e., Carlton Investments and Lendlease go up and down completely randomly.
Pair Corralation between Carlton Investments and Lendlease
Assuming the 90 days trading horizon Carlton Investments is expected to generate 2.07 times less return on investment than Lendlease. But when comparing it to its historical volatility, Carlton Investments is 2.04 times less risky than Lendlease. It trades about 0.04 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 602.00 in Lendlease Group on August 25, 2024 and sell it today you would earn a total of 63.00 from holding Lendlease Group or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlton Investments vs. Lendlease Group
Performance |
| Timeline |
| Carlton Investments |
| Lendlease Group |
Carlton Investments and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlton Investments and Lendlease
The main advantage of trading using opposite Carlton Investments and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlton Investments 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.| Carlton Investments vs. Infomedia | Carlton Investments vs. Janison Education Group | Carlton Investments vs. G8 Education | Carlton Investments vs. Autosports Group |
| Lendlease vs. Hotel Property Investments | Lendlease vs. ACDC Metals | Lendlease vs. Stelar Metals | Lendlease vs. Alternative Investment Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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