Correlation Between Lendlease and Credit Clear
Can any of the company-specific risk be diversified away by investing in both Lendlease and Credit Clear 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 Clear 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 Clear, you can compare the effects of market volatilities on Lendlease and Credit Clear 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 Clear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Credit Clear.
Diversification Opportunities for Lendlease and Credit Clear
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lendlease and Credit is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Credit Clear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Clear 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 Clear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Clear has no effect on the direction of Lendlease i.e., Lendlease and Credit Clear go up and down completely randomly.
Pair Corralation between Lendlease and Credit Clear
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.53 times more return on investment than Credit Clear. However, Lendlease Group is 1.89 times less risky than Credit Clear. It trades about 0.15 of its potential returns per unit of risk. Credit Clear is currently generating about -0.06 per unit of risk. If you would invest 629.00 in Lendlease Group on November 7, 2024 and sell it today you would earn a total of 21.00 from holding Lendlease Group or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Credit Clear
Performance |
| Timeline |
| Lendlease Group |
| Credit Clear |
Lendlease and Credit Clear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Credit Clear
The main advantage of trading using opposite Lendlease and Credit Clear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Credit Clear 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 Clear will offset losses from the drop in Credit Clear's long position.| Lendlease vs. Hutchison Telecommunications | Lendlease vs. Maggie Beer Holdings | Lendlease vs. Saferoads Holdings | Lendlease vs. Aussie Broadband |
| Credit Clear vs. Aeris Environmental | Credit Clear vs. Ironbark Capital | Credit Clear vs. Aeon Metals | Credit Clear vs. Bluescope Steel |
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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