Correlation Between Dalaroo Metals and Lendlease

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

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

Diversification Opportunities for Dalaroo Metals and Lendlease

0.53

Correlation Coefficient

Dalaroo Metals  Lendlease

Very weak diversification

The 3 months correlation between Dalaroo and Lendlease is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dalaroo Metals and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Dalaroo Metals 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 Dalaroo Metals 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 Dalaroo Metals i.e., Dalaroo Metals and Lendlease go up and down completely randomly.

Pair Corralation between Dalaroo Metals and Lendlease

Assuming the 90 days trading horizon Dalaroo Metals is expected to generate 4.01 times more return on investment than Lendlease. However, Dalaroo Metals is 4.01 times more volatile than Lendlease Group. It trades about 0.02 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.01 per unit of risk. If you would invest  1.90  in Dalaroo Metals on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Dalaroo Metals or generate 0.0% return on investment over 90 days.

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

Dalaroo Metals  vs.  Lendlease Group

Dalaroo Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dalaroo Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Dalaroo Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lendlease Group

Risk-Adjusted Performance

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.

Pair Trading with Dalaroo Metals and Lendlease

The main advantage of trading using opposite Dalaroo Metals and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalaroo Metals 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 Dalaroo Metals 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 Anywhere module to track or share privately all of your investments from the convenience of any device.