Correlation Between Land Securities and Global Net
Can any of the company-specific risk be diversified away by investing in both Land Securities and Global Net 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 Global Net 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 Global Net Lease,, you can compare the effects of market volatilities on Land Securities and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and Global Net.
Diversification Opportunities for Land Securities and Global Net
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Land and Global is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and Global Net Lease, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease, 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease, has no effect on the direction of Land Securities i.e., Land Securities and Global Net go up and down completely randomly.
Pair Corralation between Land Securities and Global Net
Assuming the 90 days horizon Land Securities Group is expected to under-perform the Global Net. In addition to that, Land Securities is 2.61 times more volatile than Global Net Lease,. It trades about -0.09 of its total potential returns per unit of risk. Global Net Lease, is currently generating about -0.15 per unit of volatility. 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 |
Land Securities Group vs. Global Net Lease,
Performance |
| Timeline |
| Land Securities Group |
| Global Net Lease, |
Land Securities and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Securities and Global Net
The main advantage of trading using opposite Land Securities and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Securities position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Land Securities vs. The Coca Cola | Land Securities vs. Sapiens International | Land Securities vs. Q2 Holdings | Land Securities vs. Cadence Design Systems |
| Global Net vs. Peakstone Realty Trust | Global Net vs. Gladstone Commercial | Global Net vs. CTO Realty Growth | Global Net vs. Brightspire Capital |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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