Correlation Between Aldel Financial and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both Aldel Financial 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 Aldel Financial and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldel Financial II and EastGroup Properties, you can compare the effects of market volatilities on Aldel Financial 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 Aldel Financial with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and EastGroup Properties.
Diversification Opportunities for Aldel Financial and EastGroup Properties
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aldel and EastGroup is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and Aldel Financial 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 Aldel Financial II 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 Aldel Financial i.e., Aldel Financial and EastGroup Properties go up and down completely randomly.
Pair Corralation between Aldel Financial and EastGroup Properties
Assuming the 90 days horizon Aldel Financial is expected to generate 453.0 times less return on investment than EastGroup Properties. But when comparing it to its historical volatility, Aldel Financial II is 12.25 times less risky than EastGroup Properties. It trades about 0.0 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14,545 in EastGroup Properties on August 30, 2024 and sell it today you would earn a total of 2,839 from holding EastGroup Properties or generate 19.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.45% |
| Values | Daily Returns |
Aldel Financial II vs. EastGroup Properties
Performance |
| Timeline |
| Aldel Financial II |
| EastGroup Properties |
Aldel Financial and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldel Financial and EastGroup Properties
The main advantage of trading using opposite Aldel Financial and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldel Financial 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.| Aldel Financial vs. Distoken Acquisition | Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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