Correlation Between Land Securities and HR Real
Can any of the company-specific risk be diversified away by investing in both Land Securities and HR Real 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 HR Real 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 HR Real Estate, you can compare the effects of market volatilities on Land Securities and HR Real 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 HR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and HR Real.
Diversification Opportunities for Land Securities and HR Real
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Land and HRUFF is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Real Estate 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 HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Land Securities i.e., Land Securities and HR Real go up and down completely randomly.
Pair Corralation between Land Securities and HR Real
Assuming the 90 days horizon Land Securities Group is expected to generate 1.55 times more return on investment than HR Real. However, Land Securities is 1.55 times more volatile than HR Real Estate. It trades about -0.11 of its potential returns per unit of risk. HR Real Estate is currently generating about -0.21 per unit of risk. If you would invest 819.00 in Land Securities Group on September 5, 2024 and sell it today you would lose (51.00) from holding Land Securities Group or give up 6.23% 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. HR Real Estate
Performance |
| Timeline |
| Land Securities Group |
| HR Real Estate |
Land Securities and HR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Securities and HR Real
The main advantage of trading using opposite Land Securities and HR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Securities position performs unexpectedly, HR Real 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 HR Real will offset losses from the drop in HR Real'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 |
| HR Real vs. Global Net Lease, | HR Real vs. VICI Properties | HR Real vs. Highlands REIT | HR Real vs. W P Carey |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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