Correlation Between Lendlease and Resource Base
Can any of the company-specific risk be diversified away by investing in both Lendlease and Resource Base 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 Resource Base into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Resource Base, you can compare the effects of market volatilities on Lendlease and Resource Base 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 Resource Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Resource Base.
Diversification Opportunities for Lendlease and Resource Base
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and Resource is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Resource Base in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Base 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 Resource Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Base has no effect on the direction of Lendlease i.e., Lendlease and Resource Base go up and down completely randomly.
Pair Corralation between Lendlease and Resource Base
Assuming the 90 days trading horizon Lendlease is expected to generate 1.76 times less return on investment than Resource Base. But when comparing it to its historical volatility, Lendlease Group is 2.19 times less risky than Resource Base. It trades about 0.21 of its potential returns per unit of risk. Resource Base is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3.60 in Resource Base on September 2, 2024 and sell it today you would earn a total of 0.40 from holding Resource Base or generate 11.11% 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. Resource Base
Performance |
| Timeline |
| Lendlease Group |
| Resource Base |
Lendlease and Resource Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Resource Base
The main advantage of trading using opposite Lendlease and Resource Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Resource Base 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 Resource Base will offset losses from the drop in Resource Base's long position.| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
| Resource Base vs. The Environmental Group | Resource Base vs. Credit Clear | Resource Base vs. Duxton Broadacre Farms | Resource Base vs. Hawsons Iron |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |