Correlation Between Lendlease and Bendigo
Can any of the company-specific risk be diversified away by investing in both Lendlease and Bendigo 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 Lendlease and Bendigo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Bendigo and Adelaide, you can compare the effects of market volatilities on Lendlease and Bendigo 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 Lendlease with a short position of Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Bendigo.
Diversification Opportunities for Lendlease and Bendigo
Good diversification
The 3 months correlation between Lendlease and Bendigo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Bendigo and Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo and Adelaide and Lendlease 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 Lendlease Group are associated (or correlated) with Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo and Adelaide has no effect on the direction of Lendlease i.e., Lendlease and Bendigo go up and down completely randomly.
Pair Corralation between Lendlease and Bendigo
Assuming the 90 days trading horizon Lendlease Group is expected to generate 3.39 times more return on investment than Bendigo. However, Lendlease is 3.39 times more volatile than Bendigo and Adelaide. It trades about 0.03 of its potential returns per unit of risk. Bendigo and Adelaide is currently generating about 0.01 per unit of risk. If you would invest 673.00 in Lendlease Group on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Lendlease Group or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Bendigo and Adelaide
Performance |
| Timeline |
| Lendlease Group |
| Bendigo and Adelaide |
Lendlease and Bendigo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Bendigo
The main advantage of trading using opposite Lendlease and Bendigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Bendigo 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 Bendigo will offset losses from the drop in Bendigo's long position.| Lendlease vs. Spirit Telecom | Lendlease vs. Alto Metals | Lendlease vs. Embark Education Group | Lendlease vs. Charter Hall Retail |
| Bendigo vs. Lendlease Group | Bendigo vs. Computershare | Bendigo vs. Charter Hall Retail | Bendigo vs. Qbe Insurance 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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