Correlation Between New World and Lend Lease
Can any of the company-specific risk be diversified away by investing in both New World and Lend Lease 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 New World and Lend Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New World Development and Lend Lease Group, you can compare the effects of market volatilities on New World and Lend Lease 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 New World with a short position of Lend Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of New World and Lend Lease.
Diversification Opportunities for New World and Lend Lease
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Lend is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding New World Development and Lend Lease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lend Lease Group and New World 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 New World Development are associated (or correlated) with Lend Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lend Lease Group has no effect on the direction of New World i.e., New World and Lend Lease go up and down completely randomly.
Pair Corralation between New World and Lend Lease
If you would invest 449.00 in Lend Lease Group on August 27, 2024 and sell it today you would earn a total of 19.00 from holding Lend Lease Group or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New World Development vs. Lend Lease Group
Performance |
| Timeline |
| New World Development |
| Lend Lease Group |
New World and Lend Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New World and Lend Lease
The main advantage of trading using opposite New World and Lend Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New World position performs unexpectedly, Lend Lease 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 Lend Lease will offset losses from the drop in Lend Lease's long position.| New World vs. Asure Software | New World vs. The Joint Corp | New World vs. Cumberland Pharmaceuticals | New World vs. Analog Devices |
| Lend Lease vs. Sun Hung Kai | Lend Lease vs. Hang Lung Properties | Lend Lease vs. Swire Pacific | Lend Lease vs. Sino Land Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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