Correlation Between Lendlease and Credit Corp
Can any of the company-specific risk be diversified away by investing in both Lendlease and Credit Corp 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 Credit Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Credit Corp Group, you can compare the effects of market volatilities on Lendlease and Credit Corp 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 Credit Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Credit Corp.
Diversification Opportunities for Lendlease and Credit Corp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and Credit is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Credit Corp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Corp Group 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 Credit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Corp Group has no effect on the direction of Lendlease i.e., Lendlease and Credit Corp go up and down completely randomly.
Pair Corralation between Lendlease and Credit Corp
Assuming the 90 days trading horizon Lendlease is expected to generate 25.51 times less return on investment than Credit Corp. But when comparing it to its historical volatility, Lendlease Group is 1.25 times less risky than Credit Corp. It trades about 0.01 of its potential returns per unit of risk. Credit Corp Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,553 in Credit Corp Group on August 30, 2024 and sell it today you would earn a total of 224.00 from holding Credit Corp Group or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Credit Corp Group
Performance |
| Timeline |
| Lendlease Group |
| Credit Corp Group |
Lendlease and Credit Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Credit Corp
The main advantage of trading using opposite Lendlease and Credit Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Credit Corp 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 Credit Corp will offset losses from the drop in Credit Corp's long position.| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye Medical |
| Credit Corp vs. Hutchison Telecommunications | Credit Corp vs. IDP Education | Credit Corp vs. Strickland Metals | Credit Corp vs. Aeon Metals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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