Correlation Between EastGroup Properties and Big Yellow
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Big Yellow 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 Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Big Yellow Group, you can compare the effects of market volatilities on EastGroup Properties and Big Yellow 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 Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Big Yellow.
Diversification Opportunities for EastGroup Properties and Big Yellow
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EastGroup and Big is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group 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 Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Big Yellow go up and down completely randomly.
Pair Corralation between EastGroup Properties and Big Yellow
Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.43 times more return on investment than Big Yellow. However, EastGroup Properties is 2.32 times less risky than Big Yellow. It trades about 0.04 of its potential returns per unit of risk. Big Yellow Group is currently generating about -0.19 per unit of risk. If you would invest 17,086 in EastGroup Properties on September 3, 2024 and sell it today you would earn a total of 135.00 from holding EastGroup Properties or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. Big Yellow Group
Performance |
| Timeline |
| EastGroup Properties |
| Big Yellow Group |
EastGroup Properties and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Big Yellow
The main advantage of trading using opposite EastGroup Properties and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| EastGroup Properties vs. SCOR PK | EastGroup Properties vs. Aquagold International | EastGroup Properties vs. SPACE | EastGroup Properties vs. T Rowe Price |
| Big Yellow vs. Terreno Realty | Big Yellow vs. LXP Industrial Trust | Big Yellow vs. Rexford Industrial Realty | Big Yellow 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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