Correlation Between Lendlease Global and Eastern
Can any of the company-specific risk be diversified away by investing in both Lendlease Global and Eastern 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 Global and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Global Commercial and Eastern Co, you can compare the effects of market volatilities on Lendlease Global and Eastern 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 Global with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease Global and Eastern.
Diversification Opportunities for Lendlease Global and Eastern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendlease and Eastern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Lendlease Global 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 Global Commercial are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Lendlease Global i.e., Lendlease Global and Eastern go up and down completely randomly.
Pair Corralation between Lendlease Global and Eastern
Assuming the 90 days horizon Lendlease Global is expected to generate 7.2 times less return on investment than Eastern. But when comparing it to its historical volatility, Lendlease Global Commercial is 9.68 times less risky than Eastern. It trades about 0.09 of its potential returns per unit of risk. Eastern Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,668 in Eastern Co on September 1, 2024 and sell it today you would earn a total of 1,204 from holding Eastern Co or generate 72.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Lendlease Global Commercial vs. Eastern Co
Performance |
| Timeline |
| Lendlease Global Com |
| Eastern |
Lendlease Global and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease Global and Eastern
The main advantage of trading using opposite Lendlease Global and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease Global position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Lendlease Global vs. Legacy Education | Lendlease Global vs. Apple Inc | Lendlease Global vs. NVIDIA | Lendlease Global vs. Microsoft |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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