Correlation Between EastGroup Properties and AlphaTime Acquisition

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

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

Diversification Opportunities for EastGroup Properties and AlphaTime Acquisition

-0.49

Correlation Coefficient

EastGroup Properties  AlphaTime Acquisition

Very good diversification

The 3 months correlation between EastGroup and AlphaTime is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition 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 AlphaTime Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaTime Acquisition has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between EastGroup Properties and AlphaTime Acquisition

Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.08 times more return on investment than AlphaTime Acquisition. However, EastGroup Properties is 12.32 times less risky than AlphaTime Acquisition. It trades about -0.03 of its potential returns per unit of risk. AlphaTime Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest  17,495  in EastGroup Properties on October 26, 2024 and sell it today you would lose (549.00) from holding EastGroup Properties or give up 3.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	42.37%
Values	Daily Returns

EastGroup Properties  vs.  AlphaTime Acquisition Corp

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.

AlphaTime Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AlphaTime Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with EastGroup Properties and AlphaTime Acquisition

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

The idea behind EastGroup Properties and AlphaTime Acquisition Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.