Correlation Between Covivio and Land Securities

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

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

Diversification Opportunities for Covivio and Land Securities

0.06

Correlation Coefficient

Covivio  Land Securities

Significant diversification

The 3 months correlation between Covivio and Land is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Covivio 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 Covivio 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 Covivio 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 Covivio i.e., Covivio and Land Securities go up and down completely randomly.

Pair Corralation between Covivio and Land Securities

Assuming the 90 days horizon Covivio is expected to under-perform the Land Securities. But the pink sheet apears to be less risky and, when comparing its historical volatility, Covivio is 2.83 times less risky than Land Securities. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Land Securities Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  704.00  in Land Securities Group on December 29, 2024 and sell it today you would earn a total of  4.00  from holding Land Securities Group or generate 0.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Covivio  vs.  Land Securities Group

Covivio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Covivio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Land Securities Group

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Land Securities Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Covivio and Land Securities

The main advantage of trading using opposite Covivio and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio 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 Covivio 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.