Correlation Between Purecycle Technologies and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both Purecycle Technologies 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 Purecycle Technologies and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purecycle Technologies Holdings and EastGroup Properties, you can compare the effects of market volatilities on Purecycle Technologies 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 Purecycle Technologies with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purecycle Technologies and EastGroup Properties.
Diversification Opportunities for Purecycle Technologies and EastGroup Properties
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Purecycle and EastGroup is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Purecycle Technologies Holding and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and Purecycle Technologies 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 Purecycle Technologies Holdings 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 Purecycle Technologies i.e., Purecycle Technologies and EastGroup Properties go up and down completely randomly.
Pair Corralation between Purecycle Technologies and EastGroup Properties
Assuming the 90 days horizon Purecycle Technologies Holdings is expected to generate 4.35 times more return on investment than EastGroup Properties. However, Purecycle Technologies is 4.35 times more volatile than EastGroup Properties. It trades about 0.03 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.02 per unit of risk. If you would invest 948.00 in Purecycle Technologies Holdings on November 9, 2024 and sell it today you would earn a total of 202.00 from holding Purecycle Technologies Holdings or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Purecycle Technologies Holding vs. EastGroup Properties
Performance |
| Timeline |
| Purecycle Technologies |
| EastGroup Properties |
Purecycle Technologies and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purecycle Technologies and EastGroup Properties
The main advantage of trading using opposite Purecycle Technologies and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purecycle Technologies 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.The idea behind Purecycle Technologies Holdings and EastGroup Properties 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.
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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