Correlation Between EastGroup Properties and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Compania Cervecerias 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 Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Compania Cervecerias Unidas, you can compare the effects of market volatilities on EastGroup Properties and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Compania Cervecerias.
Diversification Opportunities for EastGroup Properties and Compania Cervecerias
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EastGroup and Compania is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Compania Cervecerias go up and down completely randomly.
Pair Corralation between EastGroup Properties and Compania Cervecerias
Considering the 90-day investment horizon EastGroup Properties is expected to generate 2.66 times less return on investment than Compania Cervecerias. In addition to that, EastGroup Properties is 1.24 times more volatile than Compania Cervecerias Unidas. It trades about 0.06 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.21 per unit of volatility. If you would invest 1,132 in Compania Cervecerias Unidas on November 27, 2024 and sell it today you would earn a total of 166.00 from holding Compania Cervecerias Unidas or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| EastGroup Properties |
| Compania Cervecerias |
EastGroup Properties and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Compania Cervecerias
The main advantage of trading using opposite EastGroup Properties and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. Plymouth Industrial REIT | EastGroup Properties vs. LXP Industrial Trust | EastGroup Properties vs. First Industrial Realty |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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