Correlation Between Apple and Eastgroup Properties

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Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Eastgroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Eastgroup Properties, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Eastgroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Eastgroup Properties.

Diversification Opportunities for Apple and Eastgroup Properties

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Apple and Eastgroup is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Eastgroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastgroup Properties and Apple 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 Apple Inc 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 Apple i.e., Apple and Eastgroup Properties go up and down completely randomly.

Pair Corralation between Apple and Eastgroup Properties

Given the investment horizon of 90 days Apple Inc is expected to generate 1.16 times more return on investment than Eastgroup Properties. However, Apple is 1.16 times more volatile than Eastgroup Properties. It trades about 0.01 of its potential returns per unit of risk. Eastgroup Properties is currently generating about -0.03 per unit of risk. If you would invest  15,098  in Apple Inc on June 27, 2022 and sell it today you would lose (55.00)  from holding Apple Inc or give up 0.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Apple Inc  vs.  Eastgroup Properties

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple Price Channel

Eastgroup Properties 
Eastgroup Performance
0 of 100
Over the last 90 days Eastgroup Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Eastgroup Properties is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the insiders.

Eastgroup Price Channel

Apple and Eastgroup Properties Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Eastgroup Properties

The main advantage of trading using opposite Apple and Eastgroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.
Apple vs. BUSHVELD MINERALS LTD
The idea behind Apple Inc 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.
Eastgroup Properties vs. Industrias Bachoco SA
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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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