Correlation Between EastGroup Properties and Liberty Northwest
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Liberty Northwest 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 Liberty Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Liberty Northwest Bancorp, you can compare the effects of market volatilities on EastGroup Properties and Liberty Northwest 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 Liberty Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Liberty Northwest.
Diversification Opportunities for EastGroup Properties and Liberty Northwest
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EastGroup and Liberty is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Liberty Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Northwest Bancorp 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 Liberty Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Northwest Bancorp has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Liberty Northwest go up and down completely randomly.
Pair Corralation between EastGroup Properties and Liberty Northwest
Considering the 90-day investment horizon EastGroup Properties is expected to generate 1.22 times more return on investment than Liberty Northwest. However, EastGroup Properties is 1.22 times more volatile than Liberty Northwest Bancorp. It trades about 0.01 of its potential returns per unit of risk. Liberty Northwest Bancorp is currently generating about -0.03 per unit of risk. If you would invest 15,238 in EastGroup Properties on October 9, 2024 and sell it today you would earn a total of 661.00 from holding EastGroup Properties or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
EastGroup Properties vs. Liberty Northwest Bancorp
Performance |
| Timeline |
| EastGroup Properties |
| Liberty Northwest Bancorp |
EastGroup Properties and Liberty Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Liberty Northwest
The main advantage of trading using opposite EastGroup Properties and Liberty Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Liberty Northwest 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 Liberty Northwest will offset losses from the drop in Liberty Northwest'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 |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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