Correlation Between Mirrabooka Investments and Lendlease
Can any of the company-specific risk be diversified away by investing in both Mirrabooka Investments and Lendlease 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 Mirrabooka Investments and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirrabooka Investments and Lendlease Group, you can compare the effects of market volatilities on Mirrabooka Investments and Lendlease 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 Mirrabooka Investments with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirrabooka Investments and Lendlease.
Diversification Opportunities for Mirrabooka Investments and Lendlease
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mirrabooka and Lendlease is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mirrabooka Investments and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Mirrabooka Investments 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 Mirrabooka Investments are associated (or correlated) with Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Mirrabooka Investments i.e., Mirrabooka Investments and Lendlease go up and down completely randomly.
Pair Corralation between Mirrabooka Investments and Lendlease
Assuming the 90 days trading horizon Mirrabooka Investments is expected to generate 0.5 times more return on investment than Lendlease. However, Mirrabooka Investments is 2.0 times less risky than Lendlease. It trades about -0.02 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.12 per unit of risk. If you would invest 343.00 in Mirrabooka Investments on October 7, 2024 and sell it today you would lose (4.00) from holding Mirrabooka Investments or give up 1.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mirrabooka Investments vs. Lendlease Group
Performance |
Timeline |
Mirrabooka Investments |
Lendlease Group |
Mirrabooka Investments and Lendlease Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mirrabooka Investments and Lendlease
The main advantage of trading using opposite Mirrabooka Investments and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirrabooka Investments position performs unexpectedly, Lendlease 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 will offset losses from the drop in Lendlease's long position.Mirrabooka Investments vs. MFF Capital Investments | Mirrabooka Investments vs. BKI Investment | Mirrabooka Investments vs. Australian United Investment | Mirrabooka Investments vs. Champion Iron |
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Check out your portfolio center.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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