Correlation Between EastGroup Properties and One Liberty

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

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

Diversification Opportunities for EastGroup Properties and One Liberty

-0.02

Correlation Coefficient

EastGroup Properties  One Liberty

Good diversification

The 3 months correlation between EastGroup and One is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and One Liberty go up and down completely randomly.

Pair Corralation between EastGroup Properties and One Liberty

Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.78 times more return on investment than One Liberty. However, EastGroup Properties is 1.28 times less risky than One Liberty. It trades about 0.39 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.06 per unit of risk. If you would invest  17,099  in EastGroup Properties on November 28, 2024 and sell it today you would earn a total of  1,090  from holding EastGroup Properties or generate 6.37% return on investment over 90 days.

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

EastGroup Properties  vs.  One Liberty Properties

EastGroup Properties

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EastGroup Properties are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, EastGroup Properties may actually be approaching a critical reversion point that can send shares even higher in March 2025.

One Liberty Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Liberty Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with EastGroup Properties and One Liberty

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

The idea behind EastGroup Properties and One Liberty Properties 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.