Correlation Between Odyssey Energy and Lendlease
Can any of the company-specific risk be diversified away by investing in both Odyssey Energy 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 Odyssey Energy and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odyssey Energy and Lendlease Group, you can compare the effects of market volatilities on Odyssey Energy 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 Odyssey Energy with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odyssey Energy and Lendlease.
Diversification Opportunities for Odyssey Energy and Lendlease
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Odyssey and Lendlease is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Odyssey Energy and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Odyssey Energy 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 Odyssey Energy 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 Odyssey Energy i.e., Odyssey Energy and Lendlease go up and down completely randomly.
Pair Corralation between Odyssey Energy and Lendlease
Assuming the 90 days trading horizon Odyssey Energy is expected to under-perform the Lendlease. In addition to that, Odyssey Energy is 3.53 times more volatile than Lendlease Group. It trades about -0.06 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.21 per unit of volatility. If you would invest 672.00 in Lendlease Group on September 2, 2024 and sell it today you would earn a total of 44.00 from holding Lendlease Group or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odyssey Energy vs. Lendlease Group
Performance |
| Timeline |
| Odyssey Energy |
| Lendlease Group |
Odyssey Energy and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odyssey Energy and Lendlease
The main advantage of trading using opposite Odyssey Energy and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odyssey Energy 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.| Odyssey Energy vs. Hudson Investment Group | Odyssey Energy vs. Carlton Investments | Odyssey Energy vs. Neurotech International | Odyssey Energy vs. Ras Technology Holdings |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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