Correlation Between Lendlease and NEXA RESOURCES

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

By analyzing existing cross correlation between Lendlease Group and NEXA RESOURCES SA, you can compare the effects of market volatilities on Lendlease and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and NEXA RESOURCES.

Diversification Opportunities for Lendlease and NEXA RESOURCES

0.09

Correlation Coefficient

Lendlease  NEXA RESOURCES

Significant diversification

The 3 months correlation between Lendlease and NEXA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of Lendlease i.e., Lendlease and NEXA RESOURCES go up and down completely randomly.

Pair Corralation between Lendlease and NEXA RESOURCES

Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the NEXA RESOURCES. But the stock apears to be less risky and, when comparing its historical volatility, Lendlease Group is 1.3 times less risky than NEXA RESOURCES. The stock trades about -0.02 of its potential returns per unit of risk. The NEXA RESOURCES SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  634.00  in NEXA RESOURCES SA on October 23, 2024 and sell it today you would lose (54.00) from holding NEXA RESOURCES SA or give up 8.52% of portfolio value over 90 days.

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

Lendlease Group  vs.  NEXA RESOURCES SA

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

NEXA RESOURCES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lendlease and NEXA RESOURCES

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

The idea behind Lendlease Group and NEXA RESOURCES SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.