Correlation Between URW EO and Lendlease
Can any of the company-specific risk be diversified away by investing in both URW EO 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 URW EO and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between URW EO 05 and Lendlease Group, you can compare the effects of market volatilities on URW EO 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 URW EO with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of URW EO and Lendlease.
Diversification Opportunities for URW EO and Lendlease
Very weak diversification
The 3 months correlation between URW and Lendlease is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding URW EO 05 and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and URW EO 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 URW EO 05 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 URW EO i.e., URW EO and Lendlease go up and down completely randomly.
Pair Corralation between URW EO and Lendlease
Assuming the 90 days trading horizon URW EO 05 is expected to generate 1.09 times more return on investment than Lendlease. However, URW EO is 1.09 times more volatile than Lendlease Group. It trades about 0.06 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.01 per unit of risk. If you would invest 354.00 in URW EO 05 on September 14, 2024 and sell it today you would earn a total of 8.00 from holding URW EO 05 or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
URW EO 05 vs. Lendlease Group
Performance |
| Timeline |
| URW EO 05 |
| Lendlease Group |
URW EO and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with URW EO and Lendlease
The main advantage of trading using opposite URW EO and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URW EO 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.| URW EO vs. North American Construction | URW EO vs. Hanison Construction Holdings | URW EO vs. American Eagle Outfitters | URW EO vs. DAIRY FARM INTL |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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