Correlation Between EastGroup Properties and SEGRO Plc
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and SEGRO 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 EastGroup Properties and SEGRO Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and SEGRO Plc, you can compare the effects of market volatilities on EastGroup Properties and SEGRO 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 EastGroup Properties with a short position of SEGRO Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and SEGRO Plc.
Diversification Opportunities for EastGroup Properties and SEGRO Plc
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EastGroup and SEGRO is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and SEGRO Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEGRO Plc 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 SEGRO Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEGRO Plc has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and SEGRO Plc go up and down completely randomly.
Pair Corralation between EastGroup Properties and SEGRO Plc
Assuming the 90 days horizon EastGroup Properties is expected to generate 0.73 times more return on investment than SEGRO Plc. However, EastGroup Properties is 1.37 times less risky than SEGRO Plc. It trades about 0.09 of its potential returns per unit of risk. SEGRO Plc is currently generating about 0.02 per unit of risk. If you would invest 15,161 in EastGroup Properties on December 30, 2024 and sell it today you would earn a total of 1,039 from holding EastGroup Properties or generate 6.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EastGroup Properties vs. SEGRO Plc
Performance |
Timeline |
EastGroup Properties |
SEGRO Plc |
EastGroup Properties and SEGRO Plc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EastGroup Properties and SEGRO Plc
The main advantage of trading using opposite EastGroup Properties and SEGRO Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, SEGRO 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 SEGRO Plc will offset losses from the drop in SEGRO Plc's long position.EastGroup Properties vs. VIENNA INSURANCE GR | EastGroup Properties vs. SPECTRAL MEDICAL | EastGroup Properties vs. Direct Line Insurance | EastGroup Properties vs. Clearside Biomedical |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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