Correlation Between Diguang Intl and EastGroup Properties

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

By analyzing existing cross correlation between Diguang Intl Dev and EastGroup Properties, you can compare the effects of market volatilities on Diguang Intl and EastGroup Properties 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 Diguang Intl with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diguang Intl and EastGroup Properties.

Diversification Opportunities for Diguang Intl and EastGroup Properties

0.67

Correlation Coefficient

Diguang Intl  EastGroup Properties

Poor diversification

The 3 months correlation between Diguang and EastGroup is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Diguang Intl Dev and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and Diguang Intl 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 Diguang Intl Dev are associated (or correlated) with EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Diguang Intl i.e., Diguang Intl and EastGroup Properties go up and down completely randomly.

Pair Corralation between Diguang Intl and EastGroup Properties

If you would invest  0.09  in Diguang Intl Dev on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Diguang Intl Dev or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.02%
Values	Daily Returns

Diguang Intl Dev  vs.  EastGroup Properties

Diguang Intl Dev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diguang Intl Dev has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

EastGroup Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EastGroup Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, EastGroup Properties is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Diguang Intl and EastGroup Properties

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

The idea behind Diguang Intl Dev and EastGroup Properties 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.