Correlation Between Lendlease and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Lendlease and SBM OFFSHORE 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 SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and SBM OFFSHORE, you can compare the effects of market volatilities on Lendlease and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and SBM OFFSHORE.
Diversification Opportunities for Lendlease and SBM OFFSHORE
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lendlease and SBM is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of Lendlease i.e., Lendlease and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Lendlease and SBM OFFSHORE
Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the SBM OFFSHORE. In addition to that, Lendlease is 1.29 times more volatile than SBM OFFSHORE. It trades about -0.02 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.05 per unit of volatility. If you would invest 1,266 in SBM OFFSHORE on October 16, 2024 and sell it today you would earn a total of 555.00 from holding SBM OFFSHORE or generate 43.84% 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. SBM OFFSHORE
Performance |
| Timeline |
| Lendlease Group |
| SBM OFFSHORE |
Lendlease and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and SBM OFFSHORE
The main advantage of trading using opposite Lendlease and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| Lendlease vs. FIH MOBILE | Lendlease vs. T Mobile | Lendlease vs. GEELY AUTOMOBILE | Lendlease vs. Casio Computer CoLtd |
| SBM OFFSHORE vs. Lendlease Group | SBM OFFSHORE vs. ANTA SPORTS PRODUCT | SBM OFFSHORE vs. FIRST SHIP LEASE | SBM OFFSHORE vs. Global Ship Lease |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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