Correlation Between Safran SA and Lendlease
Can any of the company-specific risk be diversified away by investing in both Safran SA 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 Safran SA and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safran SA and Lendlease Group, you can compare the effects of market volatilities on Safran SA 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 Safran SA with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and Lendlease.
Diversification Opportunities for Safran SA and Lendlease
Good diversification
The 3 months correlation between Safran and Lendlease is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Safran SA 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 Safran SA 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 Safran SA i.e., Safran SA and Lendlease go up and down completely randomly.
Pair Corralation between Safran SA and Lendlease
Assuming the 90 days trading horizon Safran SA is expected to generate 0.66 times more return on investment than Lendlease. However, Safran SA is 1.52 times less risky than Lendlease. It trades about 0.09 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.0 per unit of risk. If you would invest 11,516 in Safran SA on September 12, 2024 and sell it today you would earn a total of 9,004 from holding Safran SA or generate 78.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Safran SA vs. Lendlease Group
Performance |
| Timeline |
| Safran SA |
| Lendlease Group |
Safran SA and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and Lendlease
The main advantage of trading using opposite Safran SA and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA 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.| Safran SA vs. Airbus SE | Safran SA vs. General Dynamics | Safran SA vs. Superior Plus Corp | Safran SA vs. Origin Agritech |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |