Correlation Between Klpierre and Land Securities

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

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

Diversification Opportunities for Klpierre and Land Securities

0.87

Correlation Coefficient

Klpierre  Land Securities

Very poor diversification

The 3 months correlation between Klpierre and Land is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Klpierre SA 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 Klpierre 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 Klpierre SA 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 Klpierre i.e., Klpierre and Land Securities go up and down completely randomly.

Pair Corralation between Klpierre and Land Securities

Assuming the 90 days horizon Klpierre SA is expected to generate 0.88 times more return on investment than Land Securities. However, Klpierre SA is 1.13 times less risky than Land Securities. It trades about -0.06 of its potential returns per unit of risk. Land Securities Group is currently generating about -0.11 per unit of risk. If you would invest  3,110  in Klpierre SA on October 7, 2024 and sell it today you would lose (210.00) from holding Klpierre SA or give up 6.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Klpierre SA  vs.  Land Securities Group

Klpierre SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Land Securities Group

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Klpierre and Land Securities

The main advantage of trading using opposite Klpierre and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klpierre 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 Klpierre SA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.