Correlation Between Goodman and Land Securities

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

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

Diversification Opportunities for Goodman and Land Securities

0.36

Correlation Coefficient

Goodman  Land Securities

Weak diversification

The 3 months correlation between Goodman and Land is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goodman Group 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 Goodman 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 Goodman Group 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 Goodman i.e., Goodman and Land Securities go up and down completely randomly.

Pair Corralation between Goodman and Land Securities

Assuming the 90 days horizon Goodman Group is expected to generate 1.42 times more return on investment than Land Securities. However, Goodman is 1.42 times more volatile than Land Securities Group. It trades about 0.05 of its potential returns per unit of risk. Land Securities Group is currently generating about -0.03 per unit of risk. If you would invest  2,000  in Goodman Group on May 5, 2025 and sell it today you would earn a total of  150.00  from holding Goodman Group or generate 7.5% return on investment over 90 days.

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

Goodman Group  vs.  Land Securities Group

Goodman Group

Risk-Adjusted Performance

Insignificant

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

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.

Pair Trading with Goodman and Land Securities

The main advantage of trading using opposite Goodman and Land Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodman 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 Goodman Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.