Correlation Between EastGroup Properties and Ventas

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

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

Diversification Opportunities for EastGroup Properties and Ventas

0.89

Correlation Coefficient

EastGroup Properties  Ventas

Very poor diversification

The 3 months correlation between EastGroup and Ventas is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Ventas go up and down completely randomly.

Pair Corralation between EastGroup Properties and Ventas

Considering the 90-day investment horizon EastGroup Properties is expected to under-perform the Ventas. In addition to that, EastGroup Properties is 1.13 times more volatile than Ventas Inc. It trades about -0.14 of its total potential returns per unit of risk. Ventas Inc is currently generating about -0.07 per unit of volatility. If you would invest  6,302  in Ventas Inc on October 24, 2024 and sell it today you would lose (412.00) from holding Ventas Inc or give up 6.54% of portfolio value over 90 days.

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

EastGroup Properties  vs.  Ventas Inc

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.

Ventas Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ventas Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic 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 Ventas

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

The idea behind EastGroup Properties and Ventas Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.