Correlation Between Grocery Outlet and Lendlease Global

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

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

Diversification Opportunities for Grocery Outlet and Lendlease Global

-0.67

Correlation Coefficient

Grocery Outlet  Lendlease Global

Excellent diversification

The 3 months correlation between Grocery and Lendlease is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and Lendlease Global Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Global Com and Grocery Outlet 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 Grocery Outlet Holding are associated (or correlated) with Lendlease Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Global Com has no effect on the direction of Grocery Outlet i.e., Grocery Outlet and Lendlease Global go up and down completely randomly.

Pair Corralation between Grocery Outlet and Lendlease Global

Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the Lendlease Global. In addition to that, Grocery Outlet is 17.8 times more volatile than Lendlease Global Commercial. It trades about -0.06 of its total potential returns per unit of risk. Lendlease Global Commercial is currently generating about 0.13 per unit of volatility. If you would invest  44.00  in Lendlease Global Commercial on December 20, 2024 and sell it today you would earn a total of  1.00  from holding Lendlease Global Commercial or generate 2.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Grocery Outlet Holding  vs.  Lendlease Global Commercial

Grocery Outlet Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grocery Outlet Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Lendlease Global Com

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Global Commercial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Lendlease Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grocery Outlet and Lendlease Global

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

The idea behind Grocery Outlet Holding and Lendlease Global Commercial 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.