Correlation Between EastGroup Properties and Ecovyst

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

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

Diversification Opportunities for EastGroup Properties and Ecovyst

-0.45

Correlation Coefficient

EastGroup Properties  Ecovyst

Very good diversification

The 3 months correlation between EastGroup and Ecovyst is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Ecovyst go up and down completely randomly.

Pair Corralation between EastGroup Properties and Ecovyst

Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.44 times more return on investment than Ecovyst. However, EastGroup Properties is 2.3 times less risky than Ecovyst. It trades about -0.01 of its potential returns per unit of risk. Ecovyst is currently generating about -0.04 per unit of risk. If you would invest  16,444  in EastGroup Properties on October 12, 2024 and sell it today you would lose (573.00) from holding EastGroup Properties or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

EastGroup Properties  vs.  Ecovyst

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.

Ecovyst

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ecovyst are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ecovyst unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EastGroup Properties and Ecovyst

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

The idea behind EastGroup Properties and Ecovyst 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.