Correlation Between Land Securities and HR Real

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

Diversification Opportunities for Land Securities and HR Real

0.4

Correlation Coefficient

Land Securities  HR Real

Very weak diversification

The 3 months correlation between Land and HRUFF is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Land Securities Group and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Real Estate 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 HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Land Securities i.e., Land Securities and HR Real go up and down completely randomly.

Pair Corralation between Land Securities and HR Real

Assuming the 90 days horizon Land Securities is expected to generate 43.81 times less return on investment than HR Real. In addition to that, Land Securities is 1.07 times more volatile than HR Real Estate. It trades about 0.0 of its total potential returns per unit of risk. HR Real Estate is currently generating about 0.05 per unit of volatility. If you would invest  673.00  in HR Real Estate on December 28, 2024 and sell it today you would earn a total of  37.00  from holding HR Real Estate or generate 5.5% return on investment over 90 days.

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

Land Securities Group  vs.  HR Real Estate

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.

HR Real Estate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HR Real Estate are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, HR Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Land Securities and HR Real

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

The idea behind Land Securities Group and HR Real Estate 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.