Correlation Between COMMERCIAL VEHICLE and Lendlease
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and Lendlease Group, you can compare the effects of market volatilities on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and Lendlease.
Diversification Opportunities for COMMERCIAL VEHICLE and Lendlease
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between COMMERCIAL and Lendlease is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and Lendlease go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and Lendlease
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the Lendlease. In addition to that, COMMERCIAL VEHICLE is 1.66 times more volatile than Lendlease Group. It trades about -0.1 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.02 per unit of volatility. If you would invest 405.00 in Lendlease Group on September 4, 2024 and sell it today you would earn a total of 32.00 from holding Lendlease Group or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. Lendlease Group
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| Lendlease Group |
COMMERCIAL VEHICLE and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and Lendlease
The main advantage of trading using opposite COMMERCIAL VEHICLE and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE 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.| COMMERCIAL VEHICLE vs. TOTAL GABON | COMMERCIAL VEHICLE vs. Walgreens Boots Alliance | COMMERCIAL VEHICLE vs. Peak Resources Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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