Correlation Between Infomedia and Lendlease
Can any of the company-specific risk be diversified away by investing in both Infomedia 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 Infomedia and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infomedia and Lendlease Group, you can compare the effects of market volatilities on Infomedia 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 Infomedia with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infomedia and Lendlease.
Diversification Opportunities for Infomedia and Lendlease
Very weak diversification
The 3 months correlation between Infomedia and Lendlease is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Infomedia and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Infomedia 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 Infomedia 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 Infomedia i.e., Infomedia and Lendlease go up and down completely randomly.
Pair Corralation between Infomedia and Lendlease
Assuming the 90 days trading horizon Infomedia is expected to generate 1.3 times more return on investment than Lendlease. However, Infomedia is 1.3 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 0.01 per unit of risk. If you would invest 106.00 in Infomedia on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Infomedia or generate 30.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infomedia vs. Lendlease Group
Performance |
| Timeline |
| Infomedia |
| Lendlease Group |
Infomedia and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infomedia and Lendlease
The main advantage of trading using opposite Infomedia and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infomedia 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.| Infomedia vs. Amani Gold | Infomedia vs. A1 Investments Resources | Infomedia vs. Coronado Global Resources | Infomedia vs. Hutchison Telecommunications |
| Lendlease vs. Diversified United Investment | Lendlease vs. Aeon Metals | Lendlease vs. REGAL ASIAN INVESTMENTS | Lendlease vs. MFF Capital Investments |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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