Correlation Between Lendlease and ELL ENVIRONHLDGS
Can any of the company-specific risk be diversified away by investing in both Lendlease and ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and ELL ENVIRONHLDGS HD 0001, you can compare the effects of market volatilities on Lendlease and ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and ELL ENVIRONHLDGS.
Diversification Opportunities for Lendlease and ELL ENVIRONHLDGS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lendlease and ELL is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and ELL ENVIRONHLDGS HD 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELL ENVIRONHLDGS has no effect on the direction of Lendlease i.e., Lendlease and ELL ENVIRONHLDGS go up and down completely randomly.
Pair Corralation between Lendlease and ELL ENVIRONHLDGS
Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the ELL ENVIRONHLDGS. But the stock apears to be less risky and, when comparing its historical volatility, Lendlease Group is 11.8 times less risky than ELL ENVIRONHLDGS. The stock trades about -0.03 of its potential returns per unit of risk. The ELL ENVIRONHLDGS HD 0001 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.95 in ELL ENVIRONHLDGS HD 0001 on November 2, 2024 and sell it today you would earn a total of 0.40 from holding ELL ENVIRONHLDGS HD 0001 or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. ELL ENVIRONHLDGS HD 0001
Performance |
| Timeline |
| Lendlease Group |
| ELL ENVIRONHLDGS |
Lendlease and ELL ENVIRONHLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and ELL ENVIRONHLDGS
The main advantage of trading using opposite Lendlease and ELL ENVIRONHLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, ELL ENVIRONHLDGS 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 ELL ENVIRONHLDGS will offset losses from the drop in ELL ENVIRONHLDGS's long position.| Lendlease vs. Phibro Animal Health | Lendlease vs. AOI Electronics Co | Lendlease vs. TT Electronics PLC | Lendlease vs. Renesas Electronics |
| ELL ENVIRONHLDGS vs. ScanSource | ELL ENVIRONHLDGS vs. SPORTING | ELL ENVIRONHLDGS vs. Virtu Financial | ELL ENVIRONHLDGS vs. UNIQA INSURANCE GR |
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 Stocks Directory module to find actively traded stocks across global markets.
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