Correlation Between EastGroup Properties and Ascendas Real
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Ascendas Real 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 EastGroup Properties and Ascendas Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Ascendas Real Estate, you can compare the effects of market volatilities on EastGroup Properties and Ascendas Real 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 EastGroup Properties with a short position of Ascendas Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Ascendas Real.
Diversification Opportunities for EastGroup Properties and Ascendas Real
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EastGroup and Ascendas is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Ascendas Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas Real Estate and EastGroup Properties 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 EastGroup Properties are associated (or correlated) with Ascendas Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas Real Estate has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Ascendas Real go up and down completely randomly.
Pair Corralation between EastGroup Properties and Ascendas Real
Assuming the 90 days horizon EastGroup Properties is expected to generate 0.7 times more return on investment than Ascendas Real. However, EastGroup Properties is 1.43 times less risky than Ascendas Real. It trades about -0.02 of its potential returns per unit of risk. Ascendas Real Estate is currently generating about -0.07 per unit of risk. If you would invest 16,462 in EastGroup Properties on September 6, 2024 and sell it today you would lose (362.00) from holding EastGroup Properties or give up 2.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
EastGroup Properties vs. Ascendas Real Estate
Performance |
Timeline |
EastGroup Properties |
Ascendas Real Estate |
EastGroup Properties and Ascendas Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EastGroup Properties and Ascendas Real
The main advantage of trading using opposite EastGroup Properties and Ascendas Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Ascendas Real 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 Ascendas Real will offset losses from the drop in Ascendas Real's long position.The idea behind EastGroup Properties and Ascendas Real Estate 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.Ascendas Real vs. UET United Electronic | Ascendas Real vs. STORE ELECTRONIC | Ascendas Real vs. ORMAT TECHNOLOGIES | Ascendas Real vs. Benchmark Electronics |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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