Correlation Between Lendlease and PT Steel
Can any of the company-specific risk be diversified away by investing in both Lendlease and PT Steel 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 PT Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and PT Steel Pipe, you can compare the effects of market volatilities on Lendlease and PT Steel 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 PT Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and PT Steel.
Diversification Opportunities for Lendlease and PT Steel
Very weak diversification
The 3 months correlation between Lendlease and S08 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and PT Steel Pipe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Steel Pipe 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 PT Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Steel Pipe has no effect on the direction of Lendlease i.e., Lendlease and PT Steel go up and down completely randomly.
Pair Corralation between Lendlease and PT Steel
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.42 times more return on investment than PT Steel. However, Lendlease Group is 2.4 times less risky than PT Steel. It trades about -0.03 of its potential returns per unit of risk. PT Steel Pipe is currently generating about -0.03 per unit of risk. If you would invest 404.00 in Lendlease Group on November 2, 2024 and sell it today you would lose (27.00) from holding Lendlease Group or give up 6.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. PT Steel Pipe
Performance |
| Timeline |
| Lendlease Group |
| PT Steel Pipe |
Lendlease and PT Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and PT Steel
The main advantage of trading using opposite Lendlease and PT Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, PT Steel 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 PT Steel will offset losses from the drop in PT Steel's long position.| Lendlease vs. Phibro Animal Health | Lendlease vs. AOI Electronics Co | Lendlease vs. TT Electronics PLC | Lendlease vs. Renesas Electronics |
| PT Steel vs. HANOVER INSURANCE | PT Steel vs. United Insurance Holdings | PT Steel vs. CITY OFFICE REIT | PT Steel vs. Corporate Office Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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