Correlation Between EastGroup Properties and 50249AAA1

Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and 50249AAA1 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 50249AAA1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EastGroup Properties and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on EastGroup Properties and 50249AAA1 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 50249AAA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and 50249AAA1.

Diversification Opportunities for EastGroup Properties and 50249AAA1

0.77

Correlation Coefficient

EastGroup Properties  50249AAA1

Poor diversification

The 3 months correlation between EastGroup and 50249AAA1 is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and 50249AAA1 go up and down completely randomly.

Pair Corralation between EastGroup Properties and 50249AAA1

Considering the 90-day investment horizon EastGroup Properties is expected to under-perform the 50249AAA1. But the stock apears to be less risky and, when comparing its historical volatility, EastGroup Properties is 1.04 times less risky than 50249AAA1. The stock trades about -0.31 of its potential returns per unit of risk. The LYB INTERNATIONAL FINANCE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  7,920  in LYB INTERNATIONAL FINANCE on October 9, 2024 and sell it today you would lose (66.00) from holding LYB INTERNATIONAL FINANCE or give up 0.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

EastGroup Properties  vs.  LYB INTERNATIONAL FINANCE

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.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYB INTERNATIONAL FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 50249AAA1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with EastGroup Properties and 50249AAA1

The main advantage of trading using opposite EastGroup Properties and 50249AAA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, 50249AAA1 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 50249AAA1 will offset losses from the drop in 50249AAA1's long position.

The idea behind EastGroup Properties and LYB INTERNATIONAL FINANCE 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.