Correlation Between Hutchison Telecommunicatio and Lendlease
Can any of the company-specific risk be diversified away by investing in both Hutchison Telecommunicatio 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 Hutchison Telecommunicatio and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hutchison Telecommunications and Lendlease Group, you can compare the effects of market volatilities on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hutchison Telecommunicatio and Lendlease.
Diversification Opportunities for Hutchison Telecommunicatio and Lendlease
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hutchison and Lendlease is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hutchison Telecommunications and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Hutchison Telecommunicatio 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 Hutchison Telecommunications 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 Hutchison Telecommunicatio i.e., Hutchison Telecommunicatio and Lendlease go up and down completely randomly.
Pair Corralation between Hutchison Telecommunicatio and Lendlease
Assuming the 90 days trading horizon Hutchison Telecommunications is expected to generate 3.6 times more return on investment than Lendlease. However, Hutchison Telecommunicatio is 3.6 times more volatile than Lendlease Group. It trades about 0.03 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.03 per unit of risk. If you would invest 3.00 in Hutchison Telecommunications on August 25, 2024 and sell it today you would lose (0.30) from holding Hutchison Telecommunications or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Hutchison Telecommunications vs. Lendlease Group
Performance |
| Timeline |
| Hutchison Telecommunicatio |
| Lendlease Group |
Hutchison Telecommunicatio and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hutchison Telecommunicatio and Lendlease
The main advantage of trading using opposite Hutchison Telecommunicatio and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hutchison Telecommunicatio 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.The idea behind Hutchison Telecommunications and Lendlease Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Lendlease vs. Hotel Property Investments | Lendlease vs. ACDC Metals | Lendlease vs. Stelar Metals | Lendlease vs. Alternative Investment Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |