Correlation Between Lendlease and Metro AG
Can any of the company-specific risk be diversified away by investing in both Lendlease and Metro AG 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 Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Metro AG, you can compare the effects of market volatilities on Lendlease and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Metro AG.
Diversification Opportunities for Lendlease and Metro AG
Poor diversification
The 3 months correlation between Lendlease and Metro is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Lendlease i.e., Lendlease and Metro AG go up and down completely randomly.
Pair Corralation between Lendlease and Metro AG
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.96 times more return on investment than Metro AG. However, Lendlease Group is 1.04 times less risky than Metro AG. It trades about 0.02 of its potential returns per unit of risk. Metro AG is currently generating about -0.06 per unit of risk. If you would invest 376.00 in Lendlease Group on November 7, 2024 and sell it today you would earn a total of 10.00 from holding Lendlease Group or generate 2.66% 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. Metro AG
Performance |
| Timeline |
| Lendlease Group |
| Metro AG |
Lendlease and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Metro AG
The main advantage of trading using opposite Lendlease and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| Lendlease vs. SILVER BULLET DATA | Lendlease vs. Wizz Air Holdings | Lendlease vs. SOGECLAIR SA INH | Lendlease vs. DICKER DATA LTD |
| Metro AG vs. Hanison Construction Holdings | Metro AG vs. Australian Agricultural | Metro AG vs. Hitachi Construction Machinery | Metro AG vs. Sterling Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |