Correlation Between Lendlease and Alternative Investment

Can any of the company-specific risk be diversified away by investing in both Lendlease and Alternative Investment 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 Lendlease and Alternative Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lendlease Group and Alternative Investment Trust, you can compare the effects of market volatilities on Lendlease and Alternative Investment 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 Lendlease with a short position of Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Alternative Investment.

Diversification Opportunities for Lendlease and Alternative Investment

-0.42

Correlation Coefficient

Lendlease  Alternative Investment

Very good diversification

The 3 months correlation between Lendlease and Alternative is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Alternative Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment and Lendlease 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 Lendlease Group are associated (or correlated) with Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of Lendlease i.e., Lendlease and Alternative Investment go up and down completely randomly.

Pair Corralation between Lendlease and Alternative Investment

Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the Alternative Investment. In addition to that, Lendlease is 7.81 times more volatile than Alternative Investment Trust. It trades about -0.18 of its total potential returns per unit of risk. Alternative Investment Trust is currently generating about -0.12 per unit of volatility. If you would invest  145.00  in Alternative Investment Trust on September 25, 2024 and sell it today you would lose (1.00) from holding Alternative Investment Trust or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lendlease Group  vs.  Alternative Investment Trust

Lendlease Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendlease Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Alternative Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alternative Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alternative Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lendlease and Alternative Investment

The main advantage of trading using opposite Lendlease and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.

The idea behind Lendlease Group and Alternative Investment Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.