Correlation Between Land Securities and Taylor Wimpey

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

Diversification Opportunities for Land Securities and Taylor Wimpey

0.43

Correlation Coefficient

Land Securities  Taylor Wimpey

Very weak diversification

The 3 months correlation between Land and Taylor is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and Taylor Wimpey PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Wimpey PLC 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 Taylor Wimpey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Wimpey PLC has no effect on the direction of Land Securities i.e., Land Securities and Taylor Wimpey go up and down completely randomly.

Pair Corralation between Land Securities and Taylor Wimpey

Assuming the 90 days horizon Land Securities Group is expected to generate 0.78 times more return on investment than Taylor Wimpey. However, Land Securities Group is 1.28 times less risky than Taylor Wimpey. It trades about -0.01 of its potential returns per unit of risk. Taylor Wimpey PLC is currently generating about -0.01 per unit of risk. If you would invest  714.00  in Land Securities Group on December 28, 2024 and sell it today you would lose (15.00) from holding Land Securities Group or give up 2.1% of portfolio value over 90 days.

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

Land Securities Group  vs.  Taylor Wimpey PLC

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. In spite of fairly strong fundamental indicators, Land Securities is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Taylor Wimpey PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Wimpey PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Taylor Wimpey is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Land Securities and Taylor Wimpey

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

The idea behind Land Securities Group and Taylor Wimpey PLC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.