Correlation Between Lend Lease and Broadstone Net

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

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

Diversification Opportunities for Lend Lease and Broadstone Net

0.7

Correlation Coefficient

Lend Lease  Broadstone Net

Poor diversification

The 3 months correlation between Lend and Broadstone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lend Lease Group and Broadstone Net LeaseInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net LeaseInc and Lend Lease 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 Lend Lease Group are associated (or correlated) with Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net LeaseInc has no effect on the direction of Lend Lease i.e., Lend Lease and Broadstone Net go up and down completely randomly.

Pair Corralation between Lend Lease and Broadstone Net

Assuming the 90 days horizon Lend Lease Group is expected to generate 0.62 times more return on investment than Broadstone Net. However, Lend Lease Group is 1.61 times less risky than Broadstone Net. It trades about -0.01 of its potential returns per unit of risk. Broadstone Net LeaseInc is currently generating about -0.07 per unit of risk. If you would invest  421.00  in Lend Lease Group on January 25, 2024 and sell it today you would lose (1.00) from holding Lend Lease Group or give up 0.24% of portfolio value over 90 days.

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

Lend Lease Group  vs.  Broadstone Net LeaseInc

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.

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 weak 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.

Pair Trading with Lend Lease and Broadstone Net

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

The idea behind Lend Lease Group and Broadstone Net LeaseInc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.