Correlation Between Platinum Asset and Lendlease

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

By analyzing existing cross correlation between Platinum Asset Management and Lendlease Group, you can compare the effects of market volatilities on Platinum Asset 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 Platinum Asset with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Lendlease.

Diversification Opportunities for Platinum Asset and Lendlease

0.64

Correlation Coefficient

Platinum Asset  Lendlease

Poor diversification

The 3 months correlation between Platinum and Lendlease is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Platinum Asset 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 Platinum Asset Management 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 Platinum Asset i.e., Platinum Asset and Lendlease go up and down completely randomly.

Pair Corralation between Platinum Asset and Lendlease

Assuming the 90 days trading horizon Platinum Asset Management is expected to under-perform the Lendlease. In addition to that, Platinum Asset is 2.0 times more volatile than Lendlease Group. It trades about -0.04 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.01 per unit of volatility. If you would invest  673.00  in Lendlease Group on November 20, 2024 and sell it today you would earn a total of  4.00  from holding Lendlease Group or generate 0.59% return on investment over 90 days.

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

Platinum Asset Management  vs.  Lendlease Group

Platinum Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Platinum Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Lendlease Group

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Lendlease is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Platinum Asset and Lendlease

The main advantage of trading using opposite Platinum Asset and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset 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.

The idea behind Platinum Asset Management and Lendlease Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.