Correlation Between Arrow Electronics and EastGroup Properties

Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and EastGroup Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arrow Electronics and EastGroup Properties, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of EastGroup Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and EastGroup Properties.

Diversification Opportunities for Arrow Electronics and EastGroup Properties

0.24

Correlation Coefficient

Arrow Electronics  EastGroup Properties

Modest diversification

The 3 months correlation between Arrow and EastGroup is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and EastGroup Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EastGroup Properties and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and EastGroup Properties go up and down completely randomly.

Pair Corralation between Arrow Electronics and EastGroup Properties

Considering the 90-day investment horizon Arrow Electronics is expected to generate 1.47 times more return on investment than EastGroup Properties. However, Arrow Electronics is 1.47 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 0.0 per unit of risk. If you would invest  11,546  in Arrow Electronics on May 7, 2025 and sell it today you would earn a total of  65.00  from holding Arrow Electronics or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Arrow Electronics  vs.  EastGroup Properties

Arrow Electronics

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arrow Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Arrow Electronics is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

EastGroup Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days EastGroup Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, EastGroup Properties is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arrow Electronics and EastGroup Properties

The main advantage of trading using opposite Arrow Electronics and EastGroup Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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 Arrow Electronics 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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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 Stocks Directory module to find actively traded stocks across global markets.