Correlation Between Broadstone Net and Lend Lease

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

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

Diversification Opportunities for Broadstone Net and Lend Lease

0.77

Correlation Coefficient

Broadstone Net  Lend Lease

Poor diversification

The 3 months correlation between Broadstone and Lend is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net LeaseInc 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 Broadstone Net 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 Broadstone Net LeaseInc 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 Broadstone Net i.e., Broadstone Net and Lend Lease go up and down completely randomly.

Pair Corralation between Broadstone Net and Lend Lease

Considering the 90-day investment horizon Broadstone Net LeaseInc is expected to generate 0.74 times more return on investment than Lend Lease. However, Broadstone Net LeaseInc is 1.36 times less risky than Lend Lease. It trades about 0.03 of its potential returns per unit of risk. Lend Lease Group is currently generating about 0.02 per unit of risk. If you would invest  1,356  in Broadstone Net LeaseInc on January 18, 2024 and sell it today you would earn a total of  73.00  from holding Broadstone Net LeaseInc or generate 5.38% return on investment over 90 days.

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

Broadstone Net LeaseInc  vs.  Lend Lease Group

Broadstone Net LeaseInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadstone Net LeaseInc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Lend Lease Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lend Lease Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Broadstone Net and Lend Lease

The main advantage of trading using opposite Broadstone Net and Lend Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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.

The idea behind Broadstone Net LeaseInc and Lend Lease 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.