Correlation Between G III and Lendlease
Can any of the company-specific risk be diversified away by investing in both G III 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 G III and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G III Apparel Group and Lendlease Group, you can compare the effects of market volatilities on G III 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 G III with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of G III and Lendlease.
Diversification Opportunities for G III and Lendlease
Significant diversification
The 3 months correlation between GI4 and Lendlease is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding G III Apparel Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and G III 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 G III Apparel 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 G III i.e., G III and Lendlease go up and down completely randomly.
Pair Corralation between G III and Lendlease
Assuming the 90 days trading horizon G III is expected to generate 3.07 times less return on investment than Lendlease. In addition to that, G III is 1.33 times more volatile than Lendlease Group. It trades about 0.06 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.25 per unit of volatility. If you would invest 406.00 in Lendlease Group on September 3, 2024 and sell it today you would earn a total of 32.00 from holding Lendlease Group or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G III Apparel Group vs. Lendlease Group
Performance |
| Timeline |
| G III Apparel |
| Lendlease Group |
G III and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G III and Lendlease
The main advantage of trading using opposite G III and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G III 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.| G III vs. Westlake Chemical | G III vs. SK TELECOM TDADR | G III vs. Gamma Communications plc | G III vs. KINGBOARD CHEMICAL |
| Lendlease vs. KB HOME | Lendlease vs. Flutter Entertainment PLC | Lendlease vs. GigaMedia | Lendlease vs. PT Global Mediacom |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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