Correlation Between Land Securities and Fibra UNO
Can any of the company-specific risk be diversified away by investing in both Land Securities and Fibra UNO 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 Fibra UNO 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 Fibra UNO, you can compare the effects of market volatilities on Land Securities and Fibra UNO 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 Fibra UNO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and Fibra UNO.
Diversification Opportunities for Land Securities and Fibra UNO
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Land and Fibra is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and Fibra UNO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra UNO 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 Fibra UNO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra UNO has no effect on the direction of Land Securities i.e., Land Securities and Fibra UNO go up and down completely randomly.
Pair Corralation between Land Securities and Fibra UNO
Assuming the 90 days horizon Land Securities Group is expected to under-perform the Fibra UNO. But the pink sheet apears to be less risky and, when comparing its historical volatility, Land Securities Group is 1.36 times less risky than Fibra UNO. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Fibra UNO is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 120.00 in Fibra UNO on August 31, 2024 and sell it today you would lose (14.00) from holding Fibra UNO or give up 11.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Land Securities Group vs. Fibra UNO
Performance |
| Timeline |
| Land Securities Group |
| Fibra UNO |
Land Securities and Fibra UNO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Securities and Fibra UNO
The main advantage of trading using opposite Land Securities and Fibra UNO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Securities position performs unexpectedly, Fibra UNO 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 Fibra UNO will offset losses from the drop in Fibra UNO's long position.| Land Securities vs. Land Securities Group | Land Securities vs. British Land | Land Securities vs. British Land | Land Securities vs. Taylor Wimpey PLC |
| Fibra UNO vs. British Land | Fibra UNO vs. Global Net Lease, | Fibra UNO vs. VICI Properties | Fibra UNO 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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