Correlation Between Global Net and Land Securities
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Land Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease, and Land Securities Group, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Land Securities.
Diversification Opportunities for Global Net and Land Securities
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Land is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease, 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 Global 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 Global Net Lease, 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 Global Net i.e., Global Net and Land Securities go up and down completely randomly.
Pair Corralation between Global Net and Land Securities
Considering the 90-day investment horizon Global Net Lease, is expected to generate 0.38 times more return on investment than Land Securities. However, Global Net Lease, is 2.61 times less risky than Land Securities. It trades about -0.15 of its potential returns per unit of risk. Land Securities Group is currently generating about -0.09 per unit of risk. If you would invest 779.00 in Global Net Lease, on September 1, 2024 and sell it today you would lose (38.00) from holding Global Net Lease, or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease, vs. Land Securities Group
Performance |
| Timeline |
| Global Net Lease, |
| Land Securities Group |
Global Net and Land Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Land Securities
The main advantage of trading using opposite Global Net and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Peakstone Realty Trust | Global Net vs. Gladstone Commercial | Global Net vs. CTO Realty Growth | Global Net vs. Brightspire Capital |
| Land Securities vs. The Coca Cola | Land Securities vs. Sapiens International | Land Securities vs. Q2 Holdings | Land Securities vs. Cadence Design Systems |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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