Correlation Between PDG Realty and Lennar

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

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

Diversification Opportunities for PDG Realty and Lennar

0.38

Correlation Coefficient

PDG Realty  Lennar

Weak diversification

The 3 months correlation between PDG and Lennar is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PDG Realty SA and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and PDG Realty 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 PDG Realty SA are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of PDG Realty i.e., PDG Realty and Lennar go up and down completely randomly.

Pair Corralation between PDG Realty and Lennar

If you would invest  1.00  in PDG Realty SA on October 8, 2024 and sell it today you would earn a total of  0.00  from holding PDG Realty SA or generate 0.0% return on investment over 90 days.

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

PDG Realty SA  vs.  Lennar

PDG Realty SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PDG Realty SA 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.

Lennar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lennar has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with PDG Realty and Lennar

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

The idea behind PDG Realty SA and Lennar 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.