Correlation Between Lendlease and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Lendlease and VARIOUS EATERIES 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 VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and VARIOUS EATERIES LS, you can compare the effects of market volatilities on Lendlease and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and VARIOUS EATERIES.
Diversification Opportunities for Lendlease and VARIOUS EATERIES
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lendlease and VARIOUS is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Lendlease i.e., Lendlease and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Lendlease and VARIOUS EATERIES
Assuming the 90 days trading horizon Lendlease Group is expected to generate 1.38 times more return on investment than VARIOUS EATERIES. However, Lendlease is 1.38 times more volatile than VARIOUS EATERIES LS. It trades about 0.21 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about 0.21 per unit of risk. If you would invest 405.00 in Lendlease Group on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Lendlease Group or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| Lendlease Group |
| VARIOUS EATERIES |
Lendlease and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and VARIOUS EATERIES
The main advantage of trading using opposite Lendlease and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.The idea behind Lendlease Group and VARIOUS EATERIES LS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VARIOUS EATERIES vs. USWE SPORTS AB | VARIOUS EATERIES vs. Fukuyama Transporting Co | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. NetSol Technologies |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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