Correlation Between EastGroup Properties and JPMORGAN

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

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

Diversification Opportunities for EastGroup Properties and JPMORGAN

0.87

Correlation Coefficient

EastGroup Properties  JPMORGAN

Very poor diversification

The 3 months correlation between EastGroup and JPMORGAN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO 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 JPMORGAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN CHASE CO has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and JPMORGAN go up and down completely randomly.

Pair Corralation between EastGroup Properties and JPMORGAN

Considering the 90-day investment horizon EastGroup Properties is expected to generate 4.52 times more return on investment than JPMORGAN. However, EastGroup Properties is 4.52 times more volatile than JPMORGAN CHASE CO. It trades about 0.1 of its potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about 0.19 per unit of risk. If you would invest  16,057  in EastGroup Properties on December 24, 2024 and sell it today you would earn a total of  1,254  from holding EastGroup Properties or generate 7.81% return on investment over 90 days.

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

EastGroup Properties  vs.  JPMORGAN CHASE CO

EastGroup Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EastGroup Properties are ranked lower than 7 (%) 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.

JPMORGAN CHASE CO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMORGAN CHASE CO are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JPMORGAN is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EastGroup Properties and JPMORGAN

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

The idea behind EastGroup Properties and JPMORGAN CHASE CO 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 Global Correlations module to find global opportunities by holding instruments from different markets.