Correlation Between Hotel Property and Lendlease
Can any of the company-specific risk be diversified away by investing in both Hotel 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 Hotel Property and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Property Investments and Lendlease Group, you can compare the effects of market volatilities on Hotel 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 Hotel Property with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Property and Lendlease.
Diversification Opportunities for Hotel Property and Lendlease
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hotel and Lendlease is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Property Investments and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Hotel 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 Hotel Property Investments 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 Hotel Property i.e., Hotel Property and Lendlease go up and down completely randomly.
Pair Corralation between Hotel Property and Lendlease
Assuming the 90 days trading horizon Hotel Property Investments is expected to generate 0.54 times more return on investment than Lendlease. However, Hotel Property Investments is 1.84 times less risky than Lendlease. It trades about 0.42 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.05 per unit of risk. If you would invest 349.00 in Hotel Property Investments on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Hotel Property Investments or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Property Investments vs. Lendlease Group
Performance |
| Timeline |
| Hotel Property Inves |
| Lendlease Group |
Hotel Property and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Property and Lendlease
The main advantage of trading using opposite Hotel Property and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel 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.| Hotel Property vs. Scentre Group | Hotel Property vs. Vicinity Centres Re | Hotel Property vs. Charter Hall Retail | Hotel Property vs. Cromwell Property Group |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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