Correlation Between Skycity Entertainment and Lendlease
Can any of the company-specific risk be diversified away by investing in both Skycity Entertainment 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 Skycity Entertainment and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skycity Entertainment Group and Lendlease Group, you can compare the effects of market volatilities on Skycity Entertainment 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 Skycity Entertainment with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and Lendlease.
Diversification Opportunities for Skycity Entertainment and Lendlease
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Skycity and Lendlease is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Skycity Entertainment 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 Skycity Entertainment Group 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 Skycity Entertainment i.e., Skycity Entertainment and Lendlease go up and down completely randomly.
Pair Corralation between Skycity Entertainment and Lendlease
Assuming the 90 days trading horizon Skycity Entertainment Group is expected to generate 1.65 times more return on investment than Lendlease. However, Skycity Entertainment is 1.65 times more volatile than Lendlease Group. It trades about 0.1 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.15 per unit of risk. If you would invest 125.00 in Skycity Entertainment Group on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Skycity Entertainment Group or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skycity Entertainment Group vs. Lendlease Group
Performance |
| Timeline |
| Skycity Entertainment |
| Lendlease Group |
Skycity Entertainment and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skycity Entertainment and Lendlease
The main advantage of trading using opposite Skycity Entertainment and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skycity Entertainment 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.| Skycity Entertainment vs. Aneka Tambang Tbk | Skycity Entertainment vs. Unibail Rodamco Westfield SE | Skycity Entertainment vs. Macquarie Group | Skycity Entertainment vs. Commonwealth Bank |
| Lendlease vs. Diversified United Investment | Lendlease vs. Aeon Metals | Lendlease vs. REGAL ASIAN INVESTMENTS | Lendlease vs. MFF Capital Investments |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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