Correlation Between Fisher Paykel and Lendlease
Can any of the company-specific risk be diversified away by investing in both Fisher Paykel 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 Fisher Paykel and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Paykel Healthcare and Lendlease Group, you can compare the effects of market volatilities on Fisher Paykel 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 Fisher Paykel with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Paykel and Lendlease.
Diversification Opportunities for Fisher Paykel and Lendlease
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fisher and Lendlease is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Fisher Paykel 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 Fisher Paykel Healthcare 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 Fisher Paykel i.e., Fisher Paykel and Lendlease go up and down completely randomly.
Pair Corralation between Fisher Paykel and Lendlease
Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to generate 1.22 times more return on investment than Lendlease. However, Fisher Paykel is 1.22 times more volatile than Lendlease Group. It trades about 0.06 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.06 per unit of risk. If you would invest 3,282 in Fisher Paykel Healthcare on August 28, 2024 and sell it today you would earn a total of 121.00 from holding Fisher Paykel Healthcare or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Paykel Healthcare vs. Lendlease Group
Performance |
| Timeline |
| Fisher Paykel Healthcare |
| Lendlease Group |
Fisher Paykel and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Paykel and Lendlease
The main advantage of trading using opposite Fisher Paykel and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel 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.| Fisher Paykel vs. Red Hill Iron | Fisher Paykel vs. Black Rock Mining | Fisher Paykel vs. Legacy Iron Ore | Fisher Paykel vs. Ironbark Capital |
| Lendlease vs. M3 Mining | Lendlease vs. Auctus Alternative Investments | Lendlease vs. Alternative Investment Trust | Lendlease vs. K2 Asset Management |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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