Correlation Between Land Securities and Coty
Can any of the company-specific risk be diversified away by investing in both Land Securities and Coty 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 Coty 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 Coty Inc, you can compare the effects of market volatilities on Land Securities and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and Coty.
Diversification Opportunities for Land Securities and Coty
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Land and Coty is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Land Securities i.e., Land Securities and Coty go up and down completely randomly.
Pair Corralation between Land Securities and Coty
Assuming the 90 days horizon Land Securities Group is expected to under-perform the Coty. In addition to that, Land Securities is 1.39 times more volatile than Coty Inc. It trades about -0.01 of its total potential returns per unit of risk. Coty Inc is currently generating about 0.03 per unit of volatility. If you would invest 747.00 in Coty Inc on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Coty Inc or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Land Securities Group vs. Coty Inc
Performance |
| Timeline |
| Land Securities Group |
| Coty Inc |
Land Securities and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Securities and Coty
The main advantage of trading using opposite Land Securities and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Securities position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Land Securities vs. Sweetgreen | Land Securities vs. Xunlei Ltd Adr | Land Securities vs. Ark Restaurants Corp | Land Securities vs. RCI Hospitality Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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