Correlation Between Dis Chem and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Dis Chem 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 Dis Chem and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dis Chem Pharmacies and Growthpoint Properties, you can compare the effects of market volatilities on Dis Chem 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 Dis Chem with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dis Chem and Growthpoint Properties.
Diversification Opportunities for Dis Chem and Growthpoint Properties
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dis and Growthpoint is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dis Chem Pharmacies and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Dis Chem 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 Dis Chem Pharmacies 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 Dis Chem i.e., Dis Chem and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Dis Chem and Growthpoint Properties
Assuming the 90 days trading horizon Dis Chem Pharmacies is expected to generate 0.98 times more return on investment than Growthpoint Properties. However, Dis Chem Pharmacies is 1.02 times less risky than Growthpoint Properties. It trades about 0.06 of its potential returns per unit of risk. Growthpoint Properties is currently generating about -0.07 per unit of risk. If you would invest 364,334 in Dis Chem Pharmacies on August 28, 2024 and sell it today you would earn a total of 5,166 from holding Dis Chem Pharmacies or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dis Chem Pharmacies vs. Growthpoint Properties
Performance |
| Timeline |
| Dis Chem Pharmacies |
| Growthpoint Properties |
Dis Chem and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dis Chem and Growthpoint Properties
The main advantage of trading using opposite Dis Chem and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dis Chem 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.| Dis Chem vs. Centaur Bci Balanced | Dis Chem vs. Sabvest Capital | Dis Chem vs. Growthpoint Properties | Dis Chem vs. Bowler Metcalf |
| Growthpoint Properties vs. CA Sales Holdings | Growthpoint Properties vs. Harmony Gold Mining | Growthpoint Properties vs. British American Tobacco | 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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