Correlation Between Lendlease and Mystate
Can any of the company-specific risk be diversified away by investing in both Lendlease and Mystate 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 Mystate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Mystate, you can compare the effects of market volatilities on Lendlease and Mystate 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 Mystate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Mystate.
Diversification Opportunities for Lendlease and Mystate
Good diversification
The 3 months correlation between Lendlease and Mystate is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Mystate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mystate 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 Mystate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mystate has no effect on the direction of Lendlease i.e., Lendlease and Mystate go up and down completely randomly.
Pair Corralation between Lendlease and Mystate
Assuming the 90 days trading horizon Lendlease is expected to generate 2.64 times less return on investment than Mystate. In addition to that, Lendlease is 1.3 times more volatile than Mystate. It trades about 0.03 of its total potential returns per unit of risk. Mystate is currently generating about 0.11 per unit of volatility. If you would invest 287.00 in Mystate on September 4, 2024 and sell it today you would earn a total of 124.00 from holding Mystate or generate 43.21% 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. Mystate
Performance |
| Timeline |
| Lendlease Group |
| Mystate |
Lendlease and Mystate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Mystate
The main advantage of trading using opposite Lendlease and Mystate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Mystate 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 Mystate will offset losses from the drop in Mystate's long position.| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
| Mystate vs. Magellan Financial Group | Mystate vs. Pioneer Credit | Mystate vs. Lendlease Group | Mystate vs. Westpac Banking |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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