Correlation Between Indus Realty and EastGroup Properties

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

By analyzing existing cross correlation between Indus Realty Trust and EastGroup Properties, you can compare the effects of market volatilities on Indus Realty and EastGroup Properties 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 Indus Realty with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indus Realty and EastGroup Properties.

Diversification Opportunities for Indus Realty and EastGroup Properties

0.0

Correlation Coefficient

Indus Realty  EastGroup Properties

Pay attention - limited upside

The 3 months correlation between Indus and EastGroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indus Realty Trust and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and Indus Realty 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 Indus Realty Trust are associated (or correlated) with EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of Indus Realty i.e., Indus Realty and EastGroup Properties go up and down completely randomly.

Pair Corralation between Indus Realty and EastGroup Properties

If you would invest  17,071  in EastGroup Properties on November 28, 2024 and sell it today you would earn a total of  1,118  from holding EastGroup Properties or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Indus Realty Trust  vs.  EastGroup Properties

Indus Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Indus Realty is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

EastGroup Properties

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EastGroup Properties are ranked lower than 6 (%) 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 March 2025.

Pair Trading with Indus Realty and EastGroup Properties

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

The idea behind Indus Realty Trust and EastGroup Properties 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.