Correlation Between Land Securities and British Land
Can any of the company-specific risk be diversified away by investing in both Land Securities and British Land 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 Land Securities and British Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Land Securities Group and British Land, you can compare the effects of market volatilities on Land Securities and British Land 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 Land Securities with a short position of British Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and British Land.
Diversification Opportunities for Land Securities and British Land
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Land and British is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and British Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British Land and Land Securities 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 Land Securities Group are associated (or correlated) with British Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British Land has no effect on the direction of Land Securities i.e., Land Securities and British Land go up and down completely randomly.
Pair Corralation between Land Securities and British Land
Assuming the 90 days horizon Land Securities Group is expected to generate 2.28 times more return on investment than British Land. However, Land Securities is 2.28 times more volatile than British Land. It trades about 0.04 of its potential returns per unit of risk. British Land is currently generating about -0.3 per unit of risk. If you would invest 820.00 in Land Securities Group on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Land Securities Group or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Land Securities Group vs. British Land
Performance |
| Timeline |
| Land Securities Group |
| British Land |
Land Securities and British Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Securities and British Land
The main advantage of trading using opposite Land Securities and British Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Securities position performs unexpectedly, British Land 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 British Land will offset losses from the drop in British Land's long position.| Land Securities vs. Fluent Inc | Land Securities vs. Amkor Technology | Land Securities vs. Software Acquisition Group | Land Securities vs. Boston Omaha Corp |
| British Land vs. VICI Properties | British Land vs. Fibra UNO | British Land vs. Global Net Lease, | British Land vs. Highlands REIT |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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