Correlation Between Macquarie Bank and Lendlease
Can any of the company-specific risk be diversified away by investing in both Macquarie Bank and Lendlease 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 Macquarie Bank and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Bank Limited and Lendlease Group, you can compare the effects of market volatilities on Macquarie Bank and Lendlease 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 Macquarie Bank with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Bank and Lendlease.
Diversification Opportunities for Macquarie Bank and Lendlease
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macquarie and Lendlease is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Bank Limited and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Macquarie Bank 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 Macquarie Bank Limited are associated (or correlated) with Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Macquarie Bank i.e., Macquarie Bank and Lendlease go up and down completely randomly.
Pair Corralation between Macquarie Bank and Lendlease
Assuming the 90 days trading horizon Macquarie Bank is expected to generate 3.99 times less return on investment than Lendlease. But when comparing it to its historical volatility, Macquarie Bank Limited is 3.3 times less risky than Lendlease. It trades about 0.09 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 581.00 in Lendlease Group on August 31, 2024 and sell it today you would earn a total of 135.00 from holding Lendlease Group or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Bank Limited vs. Lendlease Group
Performance |
| Timeline |
| Macquarie Bank |
| Lendlease Group |
Macquarie Bank and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Bank and Lendlease
The main advantage of trading using opposite Macquarie Bank and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Bank position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Polymetals Resources | Macquarie Bank vs. Ecofibre | Macquarie Bank vs. iShares Global Healthcare |
| Lendlease vs. Diversified United Investment | Lendlease vs. Aeon Metals | Lendlease vs. REGAL ASIAN INVESTMENTS | Lendlease vs. MFF Capital Investments |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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