Correlation Between PACIFIC ONLINE and Lendlease

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

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

Diversification Opportunities for PACIFIC ONLINE and Lendlease

0.0

Correlation Coefficient

PACIFIC ONLINE  Lendlease

Pay attention - limited upside

The 3 months correlation between PACIFIC and Lendlease is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and PACIFIC ONLINE 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 PACIFIC ONLINE 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 PACIFIC ONLINE i.e., PACIFIC ONLINE and Lendlease go up and down completely randomly.

Pair Corralation between PACIFIC ONLINE and Lendlease

Assuming the 90 days trading horizon PACIFIC ONLINE is expected to generate 1.1 times more return on investment than Lendlease. However, PACIFIC ONLINE is 1.1 times more volatile than Lendlease Group. It trades about 0.04 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.02 per unit of risk. If you would invest  10.00  in PACIFIC ONLINE on October 23, 2024 and sell it today you would earn a total of  5.00  from holding PACIFIC ONLINE or generate 50.0% return on investment over 90 days.

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

PACIFIC ONLINE  vs.  Lendlease Group

PACIFIC ONLINE

Risk-Adjusted Performance

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Very Weak

Over the last 90 days PACIFIC ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PACIFIC ONLINE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 PACIFIC ONLINE and Lendlease

The main advantage of trading using opposite PACIFIC ONLINE and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE 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 PACIFIC ONLINE 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.