Correlation Between EastGroup Properties and Yara International

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

By analyzing existing cross correlation between EastGroup Properties and Yara International ASA, you can compare the effects of market volatilities on EastGroup Properties and Yara International 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 Yara International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Yara International.

Diversification Opportunities for EastGroup Properties and Yara International

0.46

Correlation Coefficient

EastGroup Properties  Yara International

Very weak diversification

The 3 months correlation between EastGroup and Yara is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA 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 Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Yara International go up and down completely randomly.

Pair Corralation between EastGroup Properties and Yara International

Assuming the 90 days horizon EastGroup Properties is expected to under-perform the Yara International. But the stock apears to be less risky and, when comparing its historical volatility, EastGroup Properties is 1.3 times less risky than Yara International. The stock trades about -0.04 of its potential returns per unit of risk. The Yara International ASA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,120  in Yara International ASA on September 13, 2024 and sell it today you would earn a total of  20.00  from holding Yara International ASA or generate 0.94% 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.  Yara International ASA

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.

Yara International ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yara International ASA 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 Yara International

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

The idea behind EastGroup Properties and Yara International ASA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.