Correlation Between Pinnacle Investment and Lendlease
Can any of the company-specific risk be diversified away by investing in both Pinnacle Investment 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 Pinnacle Investment and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Investment Management and Lendlease Group, you can compare the effects of market volatilities on Pinnacle Investment 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 Pinnacle Investment with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Investment and Lendlease.
Diversification Opportunities for Pinnacle Investment and Lendlease
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pinnacle and Lendlease is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Investment Management and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Pinnacle Investment 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 Pinnacle Investment Management 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 Pinnacle Investment i.e., Pinnacle Investment and Lendlease go up and down completely randomly.
Pair Corralation between Pinnacle Investment and Lendlease
Assuming the 90 days trading horizon Pinnacle Investment Management is expected to generate 0.99 times more return on investment than Lendlease. However, Pinnacle Investment Management is 1.01 times less risky than Lendlease. It trades about 0.15 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.0 per unit of risk. If you would invest 848.00 in Pinnacle Investment Management on August 26, 2024 and sell it today you would earn a total of 1,482 from holding Pinnacle Investment Management or generate 174.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Investment Management vs. Lendlease Group
Performance |
| Timeline |
| Pinnacle Investment |
| Lendlease Group |
Pinnacle Investment and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Investment and Lendlease
The main advantage of trading using opposite Pinnacle Investment and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Investment 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.| Pinnacle Investment vs. National Australia Bank | Pinnacle Investment vs. National Australia Bank | Pinnacle Investment vs. Westpac Banking | Pinnacle Investment vs. National Australia Bank |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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