Correlation Between Lendlease and Infomedia
Can any of the company-specific risk be diversified away by investing in both Lendlease and Infomedia 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 Infomedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Infomedia, you can compare the effects of market volatilities on Lendlease and Infomedia 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 Infomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Infomedia.
Diversification Opportunities for Lendlease and Infomedia
Very weak diversification
The 3 months correlation between Lendlease and Infomedia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Infomedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infomedia 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 Infomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infomedia has no effect on the direction of Lendlease i.e., Lendlease and Infomedia go up and down completely randomly.
Pair Corralation between Lendlease and Infomedia
Assuming the 90 days trading horizon Lendlease is expected to generate 3.64 times less return on investment than Infomedia. But when comparing it to its historical volatility, Lendlease Group is 1.3 times less risky than Infomedia. It trades about 0.01 of its potential returns per unit of risk. Infomedia is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Infomedia on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Infomedia or generate 26.42% 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. Infomedia
Performance |
| Timeline |
| Lendlease Group |
| Infomedia |
Lendlease and Infomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Infomedia
The main advantage of trading using opposite Lendlease and Infomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Infomedia 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 Infomedia will offset losses from the drop in Infomedia's long position.| Lendlease vs. GDI Property Group | Lendlease vs. Champion Iron | Lendlease vs. iShares Global Healthcare | Lendlease vs. Peel Mining |
| Infomedia vs. Commonwealth Bank | Infomedia vs. Commonwealth Bank of | Infomedia vs. Champion Iron | Infomedia vs. iShares Global Healthcare |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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