Correlation Between FactSet Research and Land Securities

Can any of the company-specific risk be diversified away by investing in both FactSet Research and Land Securities 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 FactSet Research and Land Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FactSet Research Systems and Land Securities Group, you can compare the effects of market volatilities on FactSet Research and Land Securities 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 FactSet Research with a short position of Land Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of FactSet Research and Land Securities.

Diversification Opportunities for FactSet Research and Land Securities

0.18

Correlation Coefficient

FactSet Research  Land Securities

Average diversification

The 3 months correlation between FactSet and Land is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FactSet Research Systems and Land Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land Securities Group and FactSet Research 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 FactSet Research Systems are associated (or correlated) with Land Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land Securities Group has no effect on the direction of FactSet Research i.e., FactSet Research and Land Securities go up and down completely randomly.

Pair Corralation between FactSet Research and Land Securities

Considering the 90-day investment horizon FactSet Research Systems is expected to under-perform the Land Securities. But the stock apears to be less risky and, when comparing its historical volatility, FactSet Research Systems is 2.21 times less risky than Land Securities. The stock trades about -0.1 of its potential returns per unit of risk. The Land Securities Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  704.00  in Land Securities Group on December 28, 2024 and sell it today you would lose (10.00) from holding Land Securities Group or give up 1.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

FactSet Research Systems  vs.  Land Securities Group

FactSet Research Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days FactSet Research Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Land Securities Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Land Securities Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Land Securities is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FactSet Research and Land Securities

The main advantage of trading using opposite FactSet Research and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FactSet Research position performs unexpectedly, Land Securities 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 Land Securities will offset losses from the drop in Land Securities' long position.

The idea behind FactSet Research Systems and Land Securities Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.