Correlation Between Land Securities and Klpierre

Can any of the company-specific risk be diversified away by investing in both Land Securities and Klpierre 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 Klpierre 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 Klpierre SA, you can compare the effects of market volatilities on Land Securities and Klpierre 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 Klpierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Securities and Klpierre.

Diversification Opportunities for Land Securities and Klpierre

0.58

Correlation Coefficient

Land Securities  Klpierre

Very weak diversification

The 3 months correlation between Land and Klpierre is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Land Securities i.e., Land Securities and Klpierre go up and down completely randomly.

Pair Corralation between Land Securities and Klpierre

Assuming the 90 days horizon Land Securities Group is expected to under-perform the Klpierre. In addition to that, Land Securities is 1.18 times more volatile than Klpierre SA. It trades about -0.08 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.01 per unit of volatility. If you would invest  2,993  in Klpierre SA on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Klpierre SA or generate 0.2% return on investment over 90 days.

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

Land Securities Group  vs.  Klpierre SA

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. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with Land Securities and Klpierre

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

The idea behind Land Securities Group and Klpierre SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.