Correlation Between Lendlease and Duxton Broadacre
Can any of the company-specific risk be diversified away by investing in both Lendlease and Duxton Broadacre 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 Duxton Broadacre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Duxton Broadacre Farms, you can compare the effects of market volatilities on Lendlease and Duxton Broadacre 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 Duxton Broadacre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Duxton Broadacre.
Diversification Opportunities for Lendlease and Duxton Broadacre
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lendlease and Duxton is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Duxton Broadacre Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duxton Broadacre Farms 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 Duxton Broadacre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duxton Broadacre Farms has no effect on the direction of Lendlease i.e., Lendlease and Duxton Broadacre go up and down completely randomly.
Pair Corralation between Lendlease and Duxton Broadacre
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.58 times more return on investment than Duxton Broadacre. However, Lendlease Group is 1.72 times less risky than Duxton Broadacre. It trades about 0.04 of its potential returns per unit of risk. Duxton Broadacre Farms is currently generating about 0.02 per unit of risk. If you would invest 602.00 in Lendlease Group on August 25, 2024 and sell it today you would earn a total of 63.00 from holding Lendlease Group or generate 10.47% 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. Duxton Broadacre Farms
Performance |
| Timeline |
| Lendlease Group |
| Duxton Broadacre Farms |
Lendlease and Duxton Broadacre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Duxton Broadacre
The main advantage of trading using opposite Lendlease and Duxton Broadacre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Duxton Broadacre 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 Duxton Broadacre will offset losses from the drop in Duxton Broadacre's long position.| Lendlease vs. Hotel Property Investments | Lendlease vs. ACDC Metals | Lendlease vs. Stelar Metals | Lendlease vs. Alternative Investment Trust |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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