Correlation Between National Retail and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both National Retail and EastGroup Properties 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 National Retail and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and EastGroup Properties, you can compare the effects of market volatilities on National Retail and EastGroup Properties 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 National Retail with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and EastGroup Properties.
Diversification Opportunities for National Retail and EastGroup Properties
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and EastGroup is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and National Retail 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 National Retail Properties are associated (or correlated) with EastGroup Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EastGroup Properties has no effect on the direction of National Retail i.e., National Retail and EastGroup Properties go up and down completely randomly.
Pair Corralation between National Retail and EastGroup Properties
Considering the 90-day investment horizon National Retail Properties is expected to generate 0.93 times more return on investment than EastGroup Properties. However, National Retail Properties is 1.07 times less risky than EastGroup Properties. It trades about 0.06 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.01 per unit of risk. If you would invest 3,912 in National Retail Properties on August 27, 2024 and sell it today you would earn a total of 454.00 from holding National Retail Properties or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. EastGroup Properties
Performance |
| Timeline |
| National Retail Prop |
| EastGroup Properties |
National Retail and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and EastGroup Properties
The main advantage of trading using opposite National Retail and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail position performs unexpectedly, EastGroup Properties 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 EastGroup Properties will offset losses from the drop in EastGroup Properties' long position.| National Retail vs. Acadia Realty Trust | National Retail vs. Federal Realty Investment | National Retail vs. Realty Income | National Retail vs. Whitestone REIT |
| 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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