Correlation Between Pure Storage and Lend Lease
Can any of the company-specific risk be diversified away by investing in both Pure Storage and Lend Lease 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 Pure Storage and Lend Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and Lend Lease Group, you can compare the effects of market volatilities on Pure Storage and Lend Lease 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 Pure Storage with a short position of Lend Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Lend Lease.
Diversification Opportunities for Pure Storage and Lend Lease
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pure and Lend is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Lend Lease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lend Lease Group and Pure Storage 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 Pure Storage are associated (or correlated) with Lend Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lend Lease Group has no effect on the direction of Pure Storage i.e., Pure Storage and Lend Lease go up and down completely randomly.
Pair Corralation between Pure Storage and Lend Lease
Given the investment horizon of 90 days Pure Storage is expected to under-perform the Lend Lease. But the stock apears to be less risky and, when comparing its historical volatility, Pure Storage is 1.18 times less risky than Lend Lease. The stock trades about -0.09 of its potential returns per unit of risk. The Lend Lease Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Lend Lease Group on December 18, 2024 and sell it today you would lose (64.00) from holding Lend Lease Group or give up 14.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pure Storage vs. Lend Lease Group
Performance |
Timeline |
Pure Storage |
Lend Lease Group |
Pure Storage and Lend Lease Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pure Storage and Lend Lease
The main advantage of trading using opposite Pure Storage and Lend Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, Lend Lease 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 Lend Lease will offset losses from the drop in Lend Lease's long position.Pure Storage vs. Seagate Technology PLC | Pure Storage vs. HP Inc | Pure Storage vs. Dell Technologies | Pure Storage vs. Western Digital |
Lend Lease vs. Mitsubishi Estate Co | Lend Lease vs. QBE Insurance Group | Lend Lease vs. Macquarie Group Ltd | Lend Lease vs. Computershare Ltd ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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