Correlation Between Lendlease and British Amer
Can any of the company-specific risk be diversified away by investing in both Lendlease and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Bailador Technology Invest, you can compare the effects of market volatilities on Lendlease and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and British Amer.
Diversification Opportunities for Lendlease and British Amer
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and British is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of Lendlease i.e., Lendlease and British Amer go up and down completely randomly.
Pair Corralation between Lendlease and British Amer
Assuming the 90 days trading horizon Lendlease Group is expected to generate 1.71 times more return on investment than British Amer. However, Lendlease is 1.71 times more volatile than Bailador Technology Invest. It trades about 0.17 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.05 per unit of risk. If you would invest 676.00 in Lendlease Group on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Lendlease Group or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lendlease Group vs. Bailador Technology Invest
Performance |
| Timeline |
| Lendlease Group |
| Bailador Technology |
Lendlease and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and British Amer
The main advantage of trading using opposite Lendlease and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye Medical |
| British Amer vs. Iron Road | British Amer vs. The Environmental Group | British Amer vs. Aeris Environmental | British Amer vs. Carnegie Clean Energy |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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