Correlation Between NEW MILLENNIUM and Lendlease

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

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

Diversification Opportunities for NEW MILLENNIUM and Lendlease

0.1

Correlation Coefficient

NEW MILLENNIUM  Lendlease

Average diversification

The 3 months correlation between NEW and Lendlease is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and NEW MILLENNIUM 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 NEW MILLENNIUM IRON 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 NEW MILLENNIUM i.e., NEW MILLENNIUM and Lendlease go up and down completely randomly.

Pair Corralation between NEW MILLENNIUM and Lendlease

Assuming the 90 days trading horizon NEW MILLENNIUM IRON is expected to generate 1.3 times more return on investment than Lendlease. However, NEW MILLENNIUM is 1.3 times more volatile than Lendlease Group. It trades about 0.0 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.26 per unit of risk. If you would invest  810.00  in NEW MILLENNIUM IRON on October 10, 2024 and sell it today you would lose (5.00) from holding NEW MILLENNIUM IRON or give up 0.62% of portfolio value over 90 days.

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

NEW MILLENNIUM IRON  vs.  Lendlease Group

NEW MILLENNIUM IRON

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NEW MILLENNIUM IRON are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, NEW MILLENNIUM may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unsteady performance, the Stock's basic 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 NEW MILLENNIUM and Lendlease

The main advantage of trading using opposite NEW MILLENNIUM and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM 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.

The idea behind NEW MILLENNIUM IRON and Lendlease 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.