Correlation Between Ora Banda and Lendlease
Can any of the company-specific risk be diversified away by investing in both Ora Banda 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 Ora Banda and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ora Banda Mining and Lendlease Group, you can compare the effects of market volatilities on Ora Banda 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 Ora Banda with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ora Banda and Lendlease.
Diversification Opportunities for Ora Banda and Lendlease
Excellent diversification
The 3 months correlation between Ora and Lendlease is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Ora Banda 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 Ora Banda Mining 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 Ora Banda i.e., Ora Banda and Lendlease go up and down completely randomly.
Pair Corralation between Ora Banda and Lendlease
Assuming the 90 days trading horizon Ora Banda Mining is expected to under-perform the Lendlease. In addition to that, Ora Banda is 3.24 times more volatile than Lendlease Group. It trades about -0.24 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.19 per unit of volatility. If you would invest 677.00 in Lendlease Group on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Lendlease Group or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ora Banda Mining vs. Lendlease Group
Performance |
| Timeline |
| Ora Banda Mining |
| Lendlease Group |
Ora Banda and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ora Banda and Lendlease
The main advantage of trading using opposite Ora Banda and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ora Banda 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.| Ora Banda vs. Northern Star Resources | Ora Banda vs. Evolution Mining | Ora Banda vs. Sandfire Resources NL | Ora Banda vs. Aneka Tambang Tbk |
| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
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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