Correlation Between EastGroup Properties and Americold Realty
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Americold Realty 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 Americold Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Americold Realty Trust, you can compare the effects of market volatilities on EastGroup Properties and Americold Realty 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 Americold Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Americold Realty.
Diversification Opportunities for EastGroup Properties and Americold Realty
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EastGroup and Americold is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Americold Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americold Realty Trust 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 Americold Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americold Realty Trust has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Americold Realty go up and down completely randomly.
Pair Corralation between EastGroup Properties and Americold Realty
Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.46 times more return on investment than Americold Realty. However, EastGroup Properties is 2.17 times less risky than Americold Realty. It trades about -0.28 of its potential returns per unit of risk. Americold Realty Trust is currently generating about -0.27 per unit of risk. If you would invest 18,121 in EastGroup Properties on August 24, 2024 and sell it today you would lose (1,193) from holding EastGroup Properties or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. Americold Realty Trust
Performance |
| Timeline |
| EastGroup Properties |
| Americold Realty Trust |
EastGroup Properties and Americold Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Americold Realty
The main advantage of trading using opposite EastGroup Properties and Americold Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Americold Realty 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 Americold Realty will offset losses from the drop in Americold Realty's 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 |
| Americold Realty vs. Rexford Industrial Realty | Americold Realty vs. Terreno Realty | Americold Realty vs. First Industrial Realty | Americold Realty vs. Plymouth Industrial REIT |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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