Correlation Between EastGroup Properties and Vita Coco

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

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

Diversification Opportunities for EastGroup Properties and Vita Coco

-0.71

Correlation Coefficient

EastGroup Properties  Vita Coco

Pay attention - limited upside

The 3 months correlation between EastGroup and Vita is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Vita Coco go up and down completely randomly.

Pair Corralation between EastGroup Properties and Vita Coco

Considering the 90-day investment horizon EastGroup Properties is expected to under-perform the Vita Coco. But the stock apears to be less risky and, when comparing its historical volatility, EastGroup Properties is 1.08 times less risky than Vita Coco. The stock trades about -0.3 of its potential returns per unit of risk. The Vita Coco is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest  3,628  in Vita Coco on October 10, 2024 and sell it today you would lose (227.00) from holding Vita Coco or give up 6.26% of portfolio value over 90 days.

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

EastGroup Properties  vs.  Vita Coco

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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Vita Coco

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vita Coco are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Vita Coco displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EastGroup Properties and Vita Coco

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

The idea behind EastGroup Properties and Vita Coco 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.