Correlation Between Lendlease and Embark Early

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

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

Diversification Opportunities for Lendlease and Embark Early

0.43

Correlation Coefficient

Lendlease  Embark Early

Very weak diversification

The 3 months correlation between Lendlease and Embark is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Embark Early Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Early Education and Lendlease 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 Group are associated (or correlated) with Embark Early. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Early Education has no effect on the direction of Lendlease i.e., Lendlease and Embark Early go up and down completely randomly.

Pair Corralation between Lendlease and Embark Early

Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.81 times more return on investment than Embark Early. However, Lendlease Group is 1.23 times less risky than Embark Early. It trades about 0.04 of its potential returns per unit of risk. Embark Early Education is currently generating about -0.03 per unit of risk. If you would invest  508.00  in Lendlease Group on April 25, 2025 and sell it today you would earn a total of  15.00  from holding Lendlease Group or generate 2.95% return on investment over 90 days.

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

Lendlease Group  vs.  Embark Early Education

Lendlease Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Group are ranked lower than 3 (%) 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.

Embark Early Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Embark Early Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Embark Early 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 Lendlease and Embark Early

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

The idea behind Lendlease Group and Embark Early Education 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.