Correlation Between EastGroup Properties and Purecycle Technologies
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Purecycle Technologies 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 Purecycle Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Purecycle Technologies Holdings, you can compare the effects of market volatilities on EastGroup Properties and Purecycle Technologies 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 Purecycle Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Purecycle Technologies.
Diversification Opportunities for EastGroup Properties and Purecycle Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EastGroup and Purecycle is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Purecycle Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purecycle Technologies 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 Purecycle Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purecycle Technologies has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Purecycle Technologies go up and down completely randomly.
Pair Corralation between EastGroup Properties and Purecycle Technologies
Considering the 90-day investment horizon EastGroup Properties is expected to generate 0.35 times more return on investment than Purecycle Technologies. However, EastGroup Properties is 2.89 times less risky than Purecycle Technologies. It trades about 0.27 of its potential returns per unit of risk. Purecycle Technologies Holdings is currently generating about -0.12 per unit of risk. If you would invest 15,871 in EastGroup Properties on November 9, 2024 and sell it today you would earn a total of 1,467 from holding EastGroup Properties or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. Purecycle Technologies Holding
Performance |
| Timeline |
| EastGroup Properties |
| Purecycle Technologies |
EastGroup Properties and Purecycle Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Purecycle Technologies
The main advantage of trading using opposite EastGroup Properties and Purecycle Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Purecycle Technologies 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 Purecycle Technologies will offset losses from the drop in Purecycle Technologies' 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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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