Correlation Between Cadence Design and Land Securities
Can any of the company-specific risk be diversified away by investing in both Cadence Design 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 Cadence Design and Land Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Design Systems and Land Securities Group, you can compare the effects of market volatilities on Cadence Design 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 Cadence Design with a short position of Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and Land Securities.
Diversification Opportunities for Cadence Design and Land Securities
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cadence and Land is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems 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 Cadence Design 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 Cadence Design Systems 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 Cadence Design i.e., Cadence Design and Land Securities go up and down completely randomly.
Pair Corralation between Cadence Design and Land Securities
Given the investment horizon of 90 days Cadence Design Systems is expected to generate 0.43 times more return on investment than Land Securities. However, Cadence Design Systems is 2.3 times less risky than Land Securities. It trades about 0.07 of its potential returns per unit of risk. Land Securities Group is currently generating about 0.03 per unit of risk. If you would invest 16,823 in Cadence Design Systems on September 3, 2024 and sell it today you would earn a total of 13,858 from holding Cadence Design Systems or generate 82.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.97% |
| Values | Daily Returns |
Cadence Design Systems vs. Land Securities Group
Performance |
| Timeline |
| Cadence Design Systems |
| Land Securities Group |
Cadence Design and Land Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadence Design and Land Securities
The main advantage of trading using opposite Cadence Design and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design 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.| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
| Land Securities vs. British Land | Land Securities vs. Global Net Lease, | Land Securities vs. VICI Properties | Land Securities vs. British Land |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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