Correlation Between GDI Property and Lendlease
Can any of the company-specific risk be diversified away by investing in both GDI Property 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 GDI Property and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDI Property Group and Lendlease Group, you can compare the effects of market volatilities on GDI Property 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 GDI Property with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDI Property and Lendlease.
Diversification Opportunities for GDI Property and Lendlease
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GDI and Lendlease is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GDI Property Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and GDI Property 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 GDI Property 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 GDI Property i.e., GDI Property and Lendlease go up and down completely randomly.
Pair Corralation between GDI Property and Lendlease
Assuming the 90 days trading horizon GDI Property Group is expected to under-perform the Lendlease. But the stock apears to be less risky and, when comparing its historical volatility, GDI Property Group is 1.11 times less risky than Lendlease. The stock trades about -0.17 of its potential returns per unit of risk. The Lendlease Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 677.00 in Lendlease Group on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Lendlease Group or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDI Property Group vs. Lendlease Group
Performance |
| Timeline |
| GDI Property Group |
| Lendlease Group |
GDI Property and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDI Property and Lendlease
The main advantage of trading using opposite GDI Property and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDI Property 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.| GDI Property vs. Scentre Group | GDI Property vs. Vicinity Centres Re | GDI Property vs. Charter Hall Retail | GDI Property vs. Carindale Property Trust |
| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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