Correlation Between EastGroup Properties and Global Self

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

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

Diversification Opportunities for EastGroup Properties and Global Self

-0.01

Correlation Coefficient

EastGroup Properties  Global Self

Good diversification

The 3 months correlation between EastGroup and Global is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Global Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Self Storage 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 Global Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Self Storage has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Global Self go up and down completely randomly.

Pair Corralation between EastGroup Properties and Global Self

Considering the 90-day investment horizon EastGroup Properties is expected to generate 1.32 times more return on investment than Global Self. However, EastGroup Properties is 1.32 times more volatile than Global Self Storage. It trades about 0.13 of its potential returns per unit of risk. Global Self Storage is currently generating about -0.05 per unit of risk. If you would invest  15,973  in EastGroup Properties on December 29, 2024 and sell it today you would earn a total of  1,708  from holding EastGroup Properties or generate 10.69% 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.  Global Self Storage

EastGroup Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EastGroup Properties are ranked lower than 10 (%) 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 April 2025.

Global Self Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Global Self is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EastGroup Properties and Global Self

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

The idea behind EastGroup Properties and Global Self Storage 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.