Correlation Between Lendlease and Enegex NL

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

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

Diversification Opportunities for Lendlease and Enegex NL

0.12

Correlation Coefficient

Lendlease  Enegex NL

Average diversification

The 3 months correlation between Lendlease and Enegex is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Enegex NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enegex NL and Lendlease 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 Lendlease Group are associated (or correlated) with Enegex NL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enegex NL has no effect on the direction of Lendlease i.e., Lendlease and Enegex NL go up and down completely randomly.

Pair Corralation between Lendlease and Enegex NL

Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the Enegex NL. In addition to that, Lendlease is 1.03 times more volatile than Enegex NL. It trades about -0.44 of its total potential returns per unit of risk. Enegex NL is currently generating about 0.23 per unit of volatility. If you would invest  1.40  in Enegex NL on October 5, 2024 and sell it today you would earn a total of  0.10  from holding Enegex NL or generate 7.14% return on investment over 90 days.

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

Lendlease Group  vs.  Enegex NL

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 uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Enegex NL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enegex NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lendlease and Enegex NL

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

The idea behind Lendlease Group and Enegex NL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.