Correlation Between FleetPartners and Lendlease
Can any of the company-specific risk be diversified away by investing in both FleetPartners 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 FleetPartners and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FleetPartners Group and Lendlease Group, you can compare the effects of market volatilities on FleetPartners 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 FleetPartners with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of FleetPartners and Lendlease.
Diversification Opportunities for FleetPartners and Lendlease
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between FleetPartners and Lendlease is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FleetPartners Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and FleetPartners 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 FleetPartners 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 FleetPartners i.e., FleetPartners and Lendlease go up and down completely randomly.
Pair Corralation between FleetPartners and Lendlease
Assuming the 90 days trading horizon FleetPartners is expected to generate 1.35 times less return on investment than Lendlease. In addition to that, FleetPartners is 1.51 times more volatile than Lendlease Group. It trades about 0.08 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.17 per unit of volatility. If you would invest 676.00 in Lendlease Group on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Lendlease Group or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FleetPartners Group vs. Lendlease Group
Performance |
| Timeline |
| FleetPartners Group |
| Lendlease Group |
FleetPartners and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FleetPartners and Lendlease
The main advantage of trading using opposite FleetPartners and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FleetPartners 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.| FleetPartners vs. Lendlease Group | FleetPartners vs. Kneomedia | FleetPartners vs. Australian Unity Office | FleetPartners vs. Bio Gene Technology |
| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye Medical |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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