Correlation Between Growthpoint Properties and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Centaurus Metals 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 Growthpoint Properties and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties Australia and Centaurus Metals, you can compare the effects of market volatilities on Growthpoint Properties and Centaurus Metals 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 Growthpoint Properties with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Centaurus Metals.
Diversification Opportunities for Growthpoint Properties and Centaurus Metals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growthpoint and Centaurus is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties Austral and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and Growthpoint Properties 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 Growthpoint Properties Australia are associated (or correlated) with Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Centaurus Metals go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Centaurus Metals
Assuming the 90 days trading horizon Growthpoint Properties Australia is expected to generate 0.37 times more return on investment than Centaurus Metals. However, Growthpoint Properties Australia is 2.7 times less risky than Centaurus Metals. It trades about -0.12 of its potential returns per unit of risk. Centaurus Metals is currently generating about -0.11 per unit of risk. If you would invest 252.00 in Growthpoint Properties Australia on September 12, 2024 and sell it today you would lose (9.00) from holding Growthpoint Properties Australia or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Growthpoint Properties Austral vs. Centaurus Metals
Performance |
| Timeline |
| Growthpoint Properties |
| Centaurus Metals |
Growthpoint Properties and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Centaurus Metals
The main advantage of trading using opposite Growthpoint Properties and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| Growthpoint Properties vs. Centaurus Metals | Growthpoint Properties vs. Falcon Metals | Growthpoint Properties vs. Black Rock Mining | Growthpoint Properties vs. Truscott Mining Corp |
| Centaurus Metals vs. Cleanaway Waste Management | Centaurus Metals vs. Platinum Asset Management | Centaurus Metals vs. Step One Clothing | Centaurus Metals vs. Hutchison Telecommunications |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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