Correlation Between EastGroup Properties and Compass
Can any of the company-specific risk be diversified away by investing in both EastGroup Properties and Compass 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 EastGroup Properties and Compass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EastGroup Properties and Compass, you can compare the effects of market volatilities on EastGroup Properties and Compass 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 EastGroup Properties with a short position of Compass. Check out your portfolio center. Please also check ongoing floating volatility patterns of EastGroup Properties and Compass.
Diversification Opportunities for EastGroup Properties and Compass
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EastGroup and Compass is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding EastGroup Properties and Compass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass and EastGroup Properties 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 EastGroup Properties are associated (or correlated) with Compass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass has no effect on the direction of EastGroup Properties i.e., EastGroup Properties and Compass go up and down completely randomly.
Pair Corralation between EastGroup Properties and Compass
Considering the 90-day investment horizon EastGroup Properties is expected to under-perform the Compass. But the stock apears to be less risky and, when comparing its historical volatility, EastGroup Properties is 2.23 times less risky than Compass. The stock trades about -0.03 of its potential returns per unit of risk. The Compass is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Compass on June 6, 2025 and sell it today you would earn a total of 306.00 from holding Compass or generate 48.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EastGroup Properties vs. Compass
Performance |
| Timeline |
| EastGroup Properties |
| Compass |
EastGroup Properties and Compass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EastGroup Properties and Compass
The main advantage of trading using opposite EastGroup Properties and Compass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EastGroup Properties position performs unexpectedly, Compass 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 Compass will offset losses from the drop in Compass' long position.| EastGroup Properties vs. Rexford Industrial Realty | EastGroup Properties vs. Terreno Realty | EastGroup Properties vs. First Industrial Realty | EastGroup Properties vs. Americold Realty Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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