Correlation Between Lendlease and EP Financial
Can any of the company-specific risk be diversified away by investing in both Lendlease and EP Financial 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 EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and EP Financial Group, you can compare the effects of market volatilities on Lendlease and EP Financial 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 EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and EP Financial.
Diversification Opportunities for Lendlease and EP Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and EP1 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial 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 EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Lendlease i.e., Lendlease and EP Financial go up and down completely randomly.
Pair Corralation between Lendlease and EP Financial
Assuming the 90 days trading horizon Lendlease is expected to generate 20.32 times less return on investment than EP Financial. But when comparing it to its historical volatility, Lendlease Group is 1.76 times less risky than EP Financial. It trades about 0.0 of its potential returns per unit of risk. EP Financial Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 52.00 in EP Financial Group on August 27, 2024 and sell it today you would earn a total of 0.00 from holding EP Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. EP Financial Group
Performance |
| Timeline |
| Lendlease Group |
| EP Financial Group |
Lendlease and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and EP Financial
The main advantage of trading using opposite Lendlease and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Lendlease vs. Charter Hall Retail | Lendlease vs. Infomedia | Lendlease vs. Skycity Entertainment Group | Lendlease vs. Nine Entertainment Co |
| EP Financial vs. Perseus Mining | EP Financial vs. My Foodie Box | EP Financial vs. Spirit Telecom | EP Financial vs. Eagle Mountain Mining |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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