Correlation Between Bytes Technology and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Bytes Technology and Growthpoint 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 Bytes Technology and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bytes Technology and Growthpoint Properties, you can compare the effects of market volatilities on Bytes Technology and Growthpoint 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 Bytes Technology with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bytes Technology and Growthpoint Properties.
Diversification Opportunities for Bytes Technology and Growthpoint Properties
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bytes and Growthpoint is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bytes Technology and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Bytes Technology 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 Bytes Technology are associated (or correlated) with Growthpoint Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growthpoint Properties has no effect on the direction of Bytes Technology i.e., Bytes Technology and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Bytes Technology and Growthpoint Properties
Assuming the 90 days trading horizon Bytes Technology is expected to generate 1.05 times more return on investment than Growthpoint Properties. However, Bytes Technology is 1.05 times more volatile than Growthpoint Properties. It trades about 0.17 of its potential returns per unit of risk. Growthpoint Properties is currently generating about -0.22 per unit of risk. If you would invest 1,013,400 in Bytes Technology on November 6, 2024 and sell it today you would earn a total of 53,400 from holding Bytes Technology or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bytes Technology vs. Growthpoint Properties
Performance |
| Timeline |
| Bytes Technology |
| Growthpoint Properties |
Bytes Technology and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bytes Technology and Growthpoint Properties
The main advantage of trading using opposite Bytes Technology and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bytes Technology position performs unexpectedly, Growthpoint 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 Growthpoint Properties will offset losses from the drop in Growthpoint Properties' long position.| Bytes Technology vs. City Lodge Hotels | Bytes Technology vs. Mantengu Mining | Bytes Technology vs. Harmony Gold Mining | Bytes Technology vs. Kap Industrial Holdings |
| Growthpoint Properties vs. Kap Industrial Holdings | Growthpoint Properties vs. Trematon Capital Investments | Growthpoint Properties vs. Copper 360 | Growthpoint Properties vs. HomeChoice Investments |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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