Correlation Between Metals X and Lendlease

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

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

Diversification Opportunities for Metals X and Lendlease

-0.47

Correlation Coefficient

Metals X  Lendlease

Very good diversification

The 3 months correlation between Metals and Lendlease is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Metals X and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Metals X 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 Metals X 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 Metals X i.e., Metals X and Lendlease go up and down completely randomly.

Pair Corralation between Metals X and Lendlease

Assuming the 90 days trading horizon Metals X is expected to generate 2.23 times more return on investment than Lendlease. However, Metals X is 2.23 times more volatile than Lendlease Group. It trades about 0.11 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.04 per unit of risk. If you would invest  54.00  in Metals X on April 25, 2025 and sell it today you would earn a total of  11.00  from holding Metals X or generate 20.37% return on investment over 90 days.

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

Metals X  vs.  Lendlease Group

Metals X

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metals X are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Metals X unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Metals X and Lendlease

The main advantage of trading using opposite Metals X and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals X 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 Metals X 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.