Correlation Between Vodka Brands and Land Securities

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

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

Diversification Opportunities for Vodka Brands and Land Securities

-0.68

Correlation Coefficient

Vodka Brands  Land Securities

Excellent diversification

The 3 months correlation between Vodka and Land is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp 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 Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Land Securities go up and down completely randomly.

Pair Corralation between Vodka Brands and Land Securities

Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 1.34 times more return on investment than Land Securities. However, Vodka Brands is 1.34 times more volatile than Land Securities Group. It trades about 0.11 of its potential returns per unit of risk. Land Securities Group is currently generating about -0.05 per unit of risk. If you would invest  94.00  in Vodka Brands Corp on October 23, 2024 and sell it today you would earn a total of  27.00  from holding Vodka Brands Corp or generate 28.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Vodka Brands Corp  vs.  Land Securities Group

Vodka Brands Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Vodka Brands sustained solid returns over the last few months and may actually be approaching a breakup point.

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 inconsistent 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.

Pair Trading with Vodka Brands and Land Securities

The main advantage of trading using opposite Vodka Brands and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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 Vodka Brands Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.