Correlation Between Stockland and Shell PLC
Can any of the company-specific risk be diversified away by investing in both Stockland and Shell PLC 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 Stockland and Shell PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stockland and Shell PLC, you can compare the effects of market volatilities on Stockland and Shell PLC 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 Stockland with a short position of Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stockland and Shell PLC.
Diversification Opportunities for Stockland and Shell PLC
Very weak diversification
The 3 months correlation between Stockland and Shell is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stockland and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC and Stockland 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 Stockland are associated (or correlated) with Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of Stockland i.e., Stockland and Shell PLC go up and down completely randomly.
Pair Corralation between Stockland and Shell PLC
Assuming the 90 days horizon Stockland is expected to generate 3.21 times less return on investment than Shell PLC. But when comparing it to its historical volatility, Stockland is 1.6 times less risky than Shell PLC. It trades about 0.04 of its potential returns per unit of risk. Shell PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,224 in Shell PLC on April 29, 2025 and sell it today you would earn a total of 388.00 from holding Shell PLC or generate 12.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Stockland vs. Shell PLC
Performance |
Timeline |
Stockland |
Shell PLC |
Stockland and Shell PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stockland and Shell PLC
The main advantage of trading using opposite Stockland and Shell PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stockland position performs unexpectedly, Shell PLC 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 Shell PLC will offset losses from the drop in Shell PLC's long position.Stockland vs. British Land | Stockland vs. British Land | Stockland vs. Fibra UNO | Stockland vs. Klpierre SA |
Shell PLC vs. Eni SpA | Shell PLC vs. MOL PLC ADR | Shell PLC vs. PetroChina Co Ltd | Shell PLC vs. Equinor ASA |
Check out your portfolio center.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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |