Correlation Between Eastern and CT Real
Can any of the company-specific risk be diversified away by investing in both Eastern and CT Real 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 Eastern and CT Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and CT Real Estate, you can compare the effects of market volatilities on Eastern and CT Real 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 Eastern with a short position of CT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and CT Real.
Diversification Opportunities for Eastern and CT Real
Poor diversification
The 3 months correlation between Eastern and CTRRF is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Real Estate and Eastern 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 Eastern Co are associated (or correlated) with CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of Eastern i.e., Eastern and CT Real go up and down completely randomly.
Pair Corralation between Eastern and CT Real
If you would invest 1,037 in CT Real Estate on September 2, 2024 and sell it today you would earn a total of 0.00 from holding CT Real Estate or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Eastern Co vs. CT Real Estate
Performance |
| Timeline |
| Eastern |
| CT Real Estate |
Eastern and CT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and CT Real
The main advantage of trading using opposite Eastern and CT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, CT Real 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 CT Real will offset losses from the drop in CT Real's long position.The idea behind Eastern Co and CT Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CT Real vs. Firm Capital Property | CT Real vs. Smart REIT | CT Real vs. Slate Grocery REIT | CT Real vs. Phillips Edison Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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