Correlation Between Lendlease and Nsx
Can any of the company-specific risk be diversified away by investing in both Lendlease and Nsx 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 Nsx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Nsx, you can compare the effects of market volatilities on Lendlease and Nsx 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 Nsx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Nsx.
Diversification Opportunities for Lendlease and Nsx
Very weak diversification
The 3 months correlation between Lendlease and Nsx is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Nsx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nsx 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 Nsx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nsx has no effect on the direction of Lendlease i.e., Lendlease and Nsx go up and down completely randomly.
Pair Corralation between Lendlease and Nsx
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.35 times more return on investment than Nsx. However, Lendlease Group is 2.88 times less risky than Nsx. It trades about 0.0 of its potential returns per unit of risk. Nsx is currently generating about -0.02 per unit of risk. If you would invest 706.00 in Lendlease Group on November 27, 2024 and sell it today you would lose (78.00) from holding Lendlease Group or give up 11.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Nsx
Performance |
| Timeline |
| Lendlease Group |
| Nsx |
Lendlease and Nsx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Nsx
The main advantage of trading using opposite Lendlease and Nsx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Nsx 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 Nsx will offset losses from the drop in Nsx's long position.| Lendlease vs. Truscott Mining Corp | Lendlease vs. Stelar Metals | Lendlease vs. Centaurus Metals | Lendlease vs. Autosports Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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