Correlation Between Clime Investment and Lendlease

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

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

Diversification Opportunities for Clime Investment and Lendlease

-0.23

Correlation Coefficient

Clime Investment  Lendlease

Very good diversification

The 3 months correlation between Clime and Lendlease is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Clime Investment 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 Clime Investment Management 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 Clime Investment i.e., Clime Investment and Lendlease go up and down completely randomly.

Pair Corralation between Clime Investment and Lendlease

If you would invest  677.00  in Lendlease Group on September 3, 2024 and sell it today you would earn a total of  39.00  from holding Lendlease Group or generate 5.76% return on investment over 90 days.

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

Clime Investment Management  vs.  Lendlease Group

Clime Investment Man

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clime Investment Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clime Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lendlease Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Lendlease may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Clime Investment and Lendlease

The main advantage of trading using opposite Clime Investment and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment 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 Clime Investment Management 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.