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

EastGroup Properties  Ascendas Real

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 0.91 times more return on investment than Ascendas Real. However, EastGroup Properties is 1.1 times less risky than Ascendas Real. It trades about -0.05 of its potential returns per unit of risk. Ascendas Real Estate is currently generating about -0.18 per unit of risk. If you would invest  16,660  in EastGroup Properties on September 10, 2024 and sell it today you would lose (760.00) from holding EastGroup Properties or give up 4.56% of portfolio value over 90 days.

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

EastGroup Properties  vs.  Ascendas Real Estate

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. Despite nearly stable basic indicators, EastGroup Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ascendas Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

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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 Stocks Directory module to find actively traded stocks across global markets.