# Area sensitivity

#### Two sensitivities define each area’s position in the cycle

• We focus on factors 2 and 3 which as we have seen are two waves, or two components of a wave motion

• Each area (index) has its own contribution to the factor, and also its own sensitivity to the factor

• The graphic shows the sensitivity of each area to the two factors via the location of the point, with colour-coding by price

• There are no areas with zero exposure to cyclical risk (none near the origin (0,0))

• To interpret this, consider that at the moment both factors 2 and 3 are ‘on the up’ (see previous chart), and then note that both Manchester and Newport have large positive exposures - the factors drive the performance through the sensitivities