Correlation Between Lendlease and WA Kaolin
Can any of the company-specific risk be diversified away by investing in both Lendlease and WA Kaolin 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 WA Kaolin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and WA Kaolin, you can compare the effects of market volatilities on Lendlease and WA Kaolin 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 WA Kaolin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and WA Kaolin.
Diversification Opportunities for Lendlease and WA Kaolin
Significant diversification
The 3 months correlation between Lendlease and WAK is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and WA Kaolin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA Kaolin 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 WA Kaolin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA Kaolin has no effect on the direction of Lendlease i.e., Lendlease and WA Kaolin go up and down completely randomly.
Pair Corralation between Lendlease and WA Kaolin
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.38 times more return on investment than WA Kaolin. However, Lendlease Group is 2.67 times less risky than WA Kaolin. It trades about 0.0 of its potential returns per unit of risk. WA Kaolin is currently generating about -0.02 per unit of risk. If you would invest 711.00 in Lendlease Group on September 14, 2024 and sell it today you would lose (39.00) from holding Lendlease Group or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lendlease Group vs. WA Kaolin
Performance |
| Timeline |
| Lendlease Group |
| WA Kaolin |
Lendlease and WA Kaolin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and WA Kaolin
The main advantage of trading using opposite Lendlease and WA Kaolin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, WA Kaolin 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 WA Kaolin will offset losses from the drop in WA Kaolin's long position.| Lendlease vs. Pioneer Credit | Lendlease vs. BSP Financial Group | Lendlease vs. Data3 | Lendlease vs. Perpetual Credit Income |
| WA Kaolin vs. Seven West Media | WA Kaolin vs. Environmental Clean Technologies | WA Kaolin vs. oOhMedia | WA Kaolin vs. Chalice Mining Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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