Correlation Between Intrusion and Lend Lease

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

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

Diversification Opportunities for Intrusion and Lend Lease

-0.28

Correlation Coefficient

Intrusion  Lend Lease

Very good diversification

The 3 months correlation between Intrusion and Lend is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Intrusion and Lend Lease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lend Lease Group and Intrusion 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 Intrusion are associated (or correlated) with Lend Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lend Lease Group has no effect on the direction of Intrusion i.e., Intrusion and Lend Lease go up and down completely randomly.

Pair Corralation between Intrusion and Lend Lease

Given the investment horizon of 90 days Intrusion is expected to generate 17.56 times more return on investment than Lend Lease. However, Intrusion is 17.56 times more volatile than Lend Lease Group. It trades about 0.14 of its potential returns per unit of risk. Lend Lease Group is currently generating about 0.04 per unit of risk. If you would invest  40.00  in Intrusion on December 20, 2024 and sell it today you would earn a total of  79.00  from holding Intrusion or generate 197.5% return on investment over 90 days.

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

Intrusion  vs.  Lend Lease Group

Intrusion

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intrusion are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Intrusion showed solid returns over the last few months and may actually be approaching a breakup point.

Lend Lease Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lend Lease Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Lend Lease may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Intrusion and Lend Lease

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

The idea behind Intrusion and Lend Lease 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.