Correlation Between EastGroup Properties and SmartStop Self

Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and SmartStop 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 SmartStop 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 SmartStop Self Storage, you can compare the effects of market volatilities on EastGroup Properties and SmartStop 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 SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and SmartStop Self.

Diversification Opportunities for EastGroup Properties and SmartStop Self

-0.78

Correlation Coefficient

EastGroup Properties  SmartStop Self

Pay attention - limited upside

The 3 months correlation between EastGroup and SmartStop is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and SmartStop Self go up and down completely randomly.

Pair Corralation between EastGroup Properties and SmartStop Self

Considering the 90-day investment horizon EastGroup Properties is expected to generate 1.14 times more return on investment than SmartStop Self. However, EastGroup Properties is 1.14 times more volatile than SmartStop Self Storage. It trades about 0.01 of its potential returns per unit of risk. SmartStop Self Storage is currently generating about -0.04 per unit of risk. If you would invest  15,919  in EastGroup Properties on October 9, 2024 and sell it today you would lose (20.00) from holding EastGroup Properties or give up 0.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

EastGroup Properties  vs.  SmartStop Self Storage

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.

SmartStop Self Storage

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SmartStop Self Storage are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, SmartStop Self is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EastGroup Properties and SmartStop Self

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

The idea behind EastGroup Properties and SmartStop 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.