Correlation Between Lendlease and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Lendlease and Regis Healthcare 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 Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Regis Healthcare, you can compare the effects of market volatilities on Lendlease and Regis Healthcare 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 Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Regis Healthcare.
Diversification Opportunities for Lendlease and Regis Healthcare
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendlease and Regis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare 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 Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Lendlease i.e., Lendlease and Regis Healthcare go up and down completely randomly.
Pair Corralation between Lendlease and Regis Healthcare
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.78 times more return on investment than Regis Healthcare. However, Lendlease Group is 1.28 times less risky than Regis Healthcare. It trades about 0.16 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.04 per unit of risk. If you would invest 676.00 in Lendlease Group on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Lendlease Group or generate 5.18% 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. Regis Healthcare
Performance |
| Timeline |
| Lendlease Group |
| Regis Healthcare |
Lendlease and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Regis Healthcare
The main advantage of trading using opposite Lendlease and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Regis Healthcare 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 Regis Healthcare will offset losses from the drop in Regis Healthcare's long position.| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye Medical |
| Regis Healthcare vs. Cochlear | Regis Healthcare vs. Rea Group | Regis Healthcare vs. CSL | Regis Healthcare vs. Macquarie 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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