Correlation Between Lendlease Global and Bowen Acquisition

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

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

Diversification Opportunities for Lendlease Global and Bowen Acquisition

0.0

Correlation Coefficient

Lendlease Global  Bowen Acquisition

Pay attention - limited upside

The 3 months correlation between Lendlease and Bowen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Lendlease Global 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 Global Commercial are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Lendlease Global i.e., Lendlease Global and Bowen Acquisition go up and down completely randomly.

Pair Corralation between Lendlease Global and Bowen Acquisition

Assuming the 90 days horizon Lendlease Global is expected to generate 109.85 times less return on investment than Bowen Acquisition. But when comparing it to its historical volatility, Lendlease Global Commercial is 174.7 times less risky than Bowen Acquisition. It trades about 0.08 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Bowen Acquisition Corp on October 11, 2024 and sell it today you would earn a total of  1,150  from holding Bowen Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.43%
Values	Daily Returns

Lendlease Global Commercial  vs.  Bowen Acquisition Corp

Lendlease Global Com

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Lendlease Global Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Lendlease Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Bowen Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bowen Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bowen Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lendlease Global and Bowen Acquisition

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

The idea behind Lendlease Global Commercial and Bowen Acquisition Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.