Correlation Between MDJM and EastGroup Properties
Can any of the company-specific risk be diversified away by investing in both MDJM 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 MDJM and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MDJM and EastGroup Properties, you can compare the effects of market volatilities on MDJM 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 MDJM with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDJM and EastGroup Properties.
Diversification Opportunities for MDJM and EastGroup Properties
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MDJM and EastGroup is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding MDJM and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and MDJM 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 MDJM 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 MDJM i.e., MDJM and EastGroup Properties go up and down completely randomly.
Pair Corralation between MDJM and EastGroup Properties
Given the investment horizon of 90 days MDJM is expected to generate 12.52 times more return on investment than EastGroup Properties. However, MDJM is 12.52 times more volatile than EastGroup Properties. It trades about 0.05 of its potential returns per unit of risk. EastGroup Properties is currently generating about 0.21 per unit of risk. If you would invest 21.00 in MDJM on November 7, 2024 and sell it today you would lose (2.00) from holding MDJM or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
MDJM vs. EastGroup Properties
Performance |
| Timeline |
| MDJM |
| EastGroup Properties |
MDJM and EastGroup Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MDJM and EastGroup Properties
The main advantage of trading using opposite MDJM and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJM 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.| MDJM vs. Sphere Entertainment Co | MDJM vs. National CineMedia | MDJM vs. Regeneron Pharmaceuticals | MDJM vs. RadNet Inc |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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