Correlation Between Great Portland and Easterly Government
Can any of the company-specific risk be diversified away by investing in both Great Portland and Easterly Government 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 Great Portland and Easterly Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Portland Estates and Easterly Government Properties, you can compare the effects of market volatilities on Great Portland and Easterly Government 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 Great Portland with a short position of Easterly Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Portland and Easterly Government.
Diversification Opportunities for Great Portland and Easterly Government
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and Easterly is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Great Portland Estates and Easterly Government Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easterly Government and Great Portland 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 Great Portland Estates are associated (or correlated) with Easterly Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easterly Government has no effect on the direction of Great Portland i.e., Great Portland and Easterly Government go up and down completely randomly.
Pair Corralation between Great Portland and Easterly Government
Assuming the 90 days trading horizon Great Portland is expected to generate 1.8 times less return on investment than Easterly Government. In addition to that, Great Portland is 1.19 times more volatile than Easterly Government Properties. It trades about 0.01 of its total potential returns per unit of risk. Easterly Government Properties is currently generating about 0.02 per unit of volatility. If you would invest 1,891 in Easterly Government Properties on July 27, 2025 and sell it today you would earn a total of 19.00 from holding Easterly Government Properties or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Portland Estates vs. Easterly Government Properties
Performance |
| Timeline |
| Great Portland Estates |
| Easterly Government |
Great Portland and Easterly Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Portland and Easterly Government
The main advantage of trading using opposite Great Portland and Easterly Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Portland position performs unexpectedly, Easterly Government 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 Easterly Government will offset losses from the drop in Easterly Government's long position.| Great Portland vs. United Utilities Group | Great Portland vs. SALESFORCE INC CDR | Great Portland vs. NORTHEAST UTILITIES | Great Portland vs. Darden Restaurants |
| Easterly Government vs. Darden Restaurants | Easterly Government vs. Martin Marietta Materials | Easterly Government vs. Sumitomo Rubber Industries | Easterly Government vs. BJs Restaurants |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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