Correlation Between Lendlease and GDI Property

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

By analyzing existing cross correlation between Lendlease Group and GDI Property Group, you can compare the effects of market volatilities on Lendlease and GDI Property 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 GDI Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and GDI Property.

Diversification Opportunities for Lendlease and GDI Property

0.38

Correlation Coefficient

Lendlease  GDI Property

Weak diversification

The 3 months correlation between Lendlease and GDI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and GDI Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Property Group 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 GDI Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Property Group has no effect on the direction of Lendlease i.e., Lendlease and GDI Property go up and down completely randomly.

Pair Corralation between Lendlease and GDI Property

Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.72 times more return on investment than GDI Property. However, Lendlease Group is 1.38 times less risky than GDI Property. It trades about -0.03 of its potential returns per unit of risk. GDI Property Group is currently generating about -0.07 per unit of risk. If you would invest  708.00  in Lendlease Group on September 12, 2024 and sell it today you would lose (26.00) from holding Lendlease Group or give up 3.67% of portfolio value over 90 days.

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

Lendlease Group  vs.  GDI Property Group

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 comparatively stable fundamental indicators, Lendlease is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GDI Property Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lendlease and GDI Property

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

The idea behind Lendlease Group and GDI Property Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.