Correlation Between Lendlease and Data3
Can any of the company-specific risk be diversified away by investing in both Lendlease and Data3 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 Data3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Data3, you can compare the effects of market volatilities on Lendlease and Data3 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 Data3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Data3.
Diversification Opportunities for Lendlease and Data3
Average diversification
The 3 months correlation between Lendlease and Data3 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Data3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 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 Data3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 has no effect on the direction of Lendlease i.e., Lendlease and Data3 go up and down completely randomly.
Pair Corralation between Lendlease and Data3
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.76 times more return on investment than Data3. However, Lendlease Group is 1.32 times less risky than Data3. It trades about 0.11 of its potential returns per unit of risk. Data3 is currently generating about 0.0 per unit of risk. If you would invest 581.00 in Lendlease Group on September 1, 2024 and sell it today you would earn a total of 135.00 from holding Lendlease Group or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Data3
Performance |
| Timeline |
| Lendlease Group |
| Data3 |
Lendlease and Data3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Data3
The main advantage of trading using opposite Lendlease and Data3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Data3 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 Data3 will offset losses from the drop in Data3's long position.| Lendlease vs. Centaurus Metals | Lendlease vs. Truscott Mining Corp | Lendlease vs. Alto Metals | Lendlease vs. Actinogen Medical |
| Data3 vs. Aneka Tambang Tbk | Data3 vs. Commonwealth Bank | Data3 vs. Commonwealth Bank of | Data3 vs. Australia and New |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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