Correlation Between Lendlease and EQ Resources
Can any of the company-specific risk be diversified away by investing in both Lendlease and EQ Resources 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 EQ Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and EQ Resources, you can compare the effects of market volatilities on Lendlease and EQ Resources 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 EQ Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and EQ Resources.
Diversification Opportunities for Lendlease and EQ Resources
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lendlease and EQR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and EQ Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQ Resources 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 EQ Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQ Resources has no effect on the direction of Lendlease i.e., Lendlease and EQ Resources go up and down completely randomly.
Pair Corralation between Lendlease and EQ Resources
Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the EQ Resources. But the stock apears to be less risky and, when comparing its historical volatility, Lendlease Group is 2.7 times less risky than EQ Resources. The stock trades about 0.0 of its potential returns per unit of risk. The EQ Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.20 in EQ Resources on November 28, 2024 and sell it today you would lose (1.80) from holding EQ Resources or give up 29.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. EQ Resources
Performance |
| Timeline |
| Lendlease Group |
| EQ Resources |
Lendlease and EQ Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and EQ Resources
The main advantage of trading using opposite Lendlease and EQ Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, EQ Resources 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 EQ Resources will offset losses from the drop in EQ Resources' long position.| Lendlease vs. Navigator Global Investments | Lendlease vs. BKI Investment | Lendlease vs. Group 6 Metals | Lendlease vs. Polymetals Resources |
| EQ Resources vs. Sky Metals | EQ Resources vs. Falcon Metals | EQ Resources vs. FireFly Metals | EQ Resources vs. TPG Telecom |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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