Correlation Between American Healthcare and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both American Healthcare 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 American Healthcare and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and EastGroup Properties, you can compare the effects of market volatilities on American Healthcare 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 American Healthcare with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and EastGroup Properties.
Diversification Opportunities for American Healthcare and EastGroup Properties
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and EastGroup is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and American Healthcare 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 American Healthcare REIT, 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 American Healthcare i.e., American Healthcare and EastGroup Properties go up and down completely randomly.
Pair Corralation between American Healthcare and EastGroup Properties
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 1.95 times more return on investment than EastGroup Properties. However, American Healthcare is 1.95 times more volatile than EastGroup Properties. It trades about 0.25 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.0 per unit of risk. If you would invest 2,636 in American Healthcare REIT, on August 30, 2024 and sell it today you would earn a total of 321.00 from holding American Healthcare REIT, or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. EastGroup Properties
Performance |
| Timeline |
| American Healthcare REIT, |
| EastGroup Properties |
American Healthcare and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and EastGroup Properties
The main advantage of trading using opposite American Healthcare and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare 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.| American Healthcare vs. Boston Properties | American Healthcare vs. Douglas Emmett | American Healthcare vs. Kilroy Realty Corp | American Healthcare vs. Highwoods Properties |
| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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