Correlation Between Lendlease and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both Lendlease and Thyssenkrupp 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 Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and thyssenkrupp AG, you can compare the effects of market volatilities on Lendlease and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Thyssenkrupp.
Diversification Opportunities for Lendlease and Thyssenkrupp
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and Thyssenkrupp is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of Lendlease i.e., Lendlease and Thyssenkrupp go up and down completely randomly.
Pair Corralation between Lendlease and Thyssenkrupp
Assuming the 90 days trading horizon Lendlease is expected to generate 2.41 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, Lendlease Group is 1.38 times less risky than Thyssenkrupp. It trades about 0.01 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 461.00 in thyssenkrupp AG on November 6, 2024 and sell it today you would earn a total of 21.00 from holding thyssenkrupp AG or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. thyssenkrupp AG
Performance |
| Timeline |
| Lendlease Group |
| thyssenkrupp AG |
Lendlease and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Thyssenkrupp
The main advantage of trading using opposite Lendlease and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| Lendlease vs. QBE Insurance Group | Lendlease vs. Taiwan Semiconductor Manufacturing | Lendlease vs. MagnaChip Semiconductor Corp | Lendlease vs. UNIQA INSURANCE GR |
| Thyssenkrupp vs. HAVERTY FURNITURE A | Thyssenkrupp vs. Genertec Universal Medical | Thyssenkrupp vs. Autohome ADR | Thyssenkrupp vs. INVITATION HOMES DL |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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