Correlation Between Deneb Investments and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Deneb Investments 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 Deneb Investments and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deneb Investments and Growthpoint Properties, you can compare the effects of market volatilities on Deneb Investments 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 Deneb Investments with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deneb Investments and Growthpoint Properties.
Diversification Opportunities for Deneb Investments and Growthpoint Properties
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deneb and Growthpoint is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Deneb Investments and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Deneb Investments 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 Deneb Investments 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 Deneb Investments i.e., Deneb Investments and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Deneb Investments and Growthpoint Properties
Assuming the 90 days trading horizon Deneb Investments is expected to generate 1.68 times more return on investment than Growthpoint Properties. However, Deneb Investments is 1.68 times more volatile than Growthpoint Properties. It trades about 0.19 of its potential returns per unit of risk. Growthpoint Properties is currently generating about -0.17 per unit of risk. If you would invest 20,200 in Deneb Investments on October 28, 2024 and sell it today you would earn a total of 1,800 from holding Deneb Investments or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Deneb Investments vs. Growthpoint Properties
Performance |
| Timeline |
| Deneb Investments |
| Growthpoint Properties |
Deneb Investments and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deneb Investments and Growthpoint Properties
The main advantage of trading using opposite Deneb Investments and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deneb Investments 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.| Deneb Investments vs. Capitec Bank Holdings | Deneb Investments vs. Harmony Gold Mining | Deneb Investments vs. Boxer Retail | Deneb Investments vs. RCL Foods |
| Growthpoint Properties vs. Astoria Investments | Growthpoint Properties vs. Bytes Technology | Growthpoint Properties vs. Deneb Investments | Growthpoint Properties vs. Reinet Investments SCA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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