Correlation Between British Land and Land Securities
Can any of the company-specific risk be diversified away by investing in both British Land and Land Securities 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 British Land and Land Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British Land and Land Securities Group, you can compare the effects of market volatilities on British Land and Land Securities 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 British Land with a short position of Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Land and Land Securities.
Diversification Opportunities for British Land and Land Securities
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between British and Land is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding British Land and Land Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land Securities Group and British Land 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 British Land are associated (or correlated) with Land Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land Securities Group has no effect on the direction of British Land i.e., British Land and Land Securities go up and down completely randomly.
Pair Corralation between British Land and Land Securities
Assuming the 90 days horizon British Land is expected to under-perform the Land Securities. But the pink sheet apears to be less risky and, when comparing its historical volatility, British Land is 1.39 times less risky than Land Securities. The pink sheet trades about -0.41 of its potential returns per unit of risk. The Land Securities Group is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 810.00 in Land Securities Group on August 27, 2024 and sell it today you would lose (68.00) from holding Land Securities Group or give up 8.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British Land vs. Land Securities Group
Performance |
| Timeline |
| British Land |
| Land Securities Group |
British Land and Land Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Land and Land Securities
The main advantage of trading using opposite British Land and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Land position performs unexpectedly, Land Securities 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 Land Securities will offset losses from the drop in Land Securities' long position.| British Land vs. Global Net Lease, | British Land vs. VICI Properties | British Land vs. Highlands REIT | British Land vs. W P Carey |
| Land Securities vs. Land Securities Group | Land Securities vs. British Land | Land Securities vs. British Land | Land Securities vs. Taylor Wimpey PLC |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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