Correlation Between Lendlease and EMvision Medical
Can any of the company-specific risk be diversified away by investing in both Lendlease and EMvision Medical 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 EMvision Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and EMvision Medical Devices, you can compare the effects of market volatilities on Lendlease and EMvision Medical 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 EMvision Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and EMvision Medical.
Diversification Opportunities for Lendlease and EMvision Medical
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lendlease and EMvision is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and EMvision Medical Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMvision Medical Devices 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 EMvision Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMvision Medical Devices has no effect on the direction of Lendlease i.e., Lendlease and EMvision Medical go up and down completely randomly.
Pair Corralation between Lendlease and EMvision Medical
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.43 times more return on investment than EMvision Medical. However, Lendlease Group is 2.31 times less risky than EMvision Medical. It trades about 0.21 of its potential returns per unit of risk. EMvision Medical Devices is currently generating about 0.04 per unit of risk. If you would invest 672.00 in Lendlease Group on September 2, 2024 and sell it today you would earn a total of 44.00 from holding Lendlease Group or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. EMvision Medical Devices
Performance |
| Timeline |
| Lendlease Group |
| EMvision Medical Devices |
Lendlease and EMvision Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and EMvision Medical
The main advantage of trading using opposite Lendlease and EMvision Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, EMvision Medical 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 EMvision Medical will offset losses from the drop in EMvision Medical's long position.| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
| EMvision Medical vs. Jupiter Energy | EMvision Medical vs. WA1 Resources | EMvision Medical vs. Cooper Metals | EMvision Medical vs. OD6 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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