Correlation Between Independence Realty and Eastern
Can any of the company-specific risk be diversified away by investing in both Independence Realty and Eastern 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 Independence Realty and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Realty Trust and Eastern Co, you can compare the effects of market volatilities on Independence Realty and Eastern 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 Independence Realty with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Realty and Eastern.
Diversification Opportunities for Independence Realty and Eastern
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Independence and Eastern is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Independence Realty Trust and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Independence Realty 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 Independence Realty Trust are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Independence Realty i.e., Independence Realty and Eastern go up and down completely randomly.
Pair Corralation between Independence Realty and Eastern
Considering the 90-day investment horizon Independence Realty Trust is expected to generate 0.51 times more return on investment than Eastern. However, Independence Realty Trust is 1.95 times less risky than Eastern. It trades about 0.37 of its potential returns per unit of risk. Eastern Co is currently generating about -0.15 per unit of risk. If you would invest 1,976 in Independence Realty Trust on August 31, 2024 and sell it today you would earn a total of 225.00 from holding Independence Realty Trust or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Independence Realty Trust vs. Eastern Co
Performance |
| Timeline |
| Independence Realty Trust |
| Eastern |
Independence Realty and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Realty and Eastern
The main advantage of trading using opposite Independence Realty and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Realty position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. Kennametal |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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