Correlation Between Growthpoint Properties and Advtech
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Advtech 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 Advtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Advtech, you can compare the effects of market volatilities on Growthpoint Properties and Advtech 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 Advtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Advtech.
Diversification Opportunities for Growthpoint Properties and Advtech
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Growthpoint and Advtech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Advtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advtech 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 are associated (or correlated) with Advtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advtech has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Advtech go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Advtech
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 1.88 times less return on investment than Advtech. In addition to that, Growthpoint Properties is 1.01 times more volatile than Advtech. It trades about 0.06 of its total potential returns per unit of risk. Advtech is currently generating about 0.11 per unit of volatility. If you would invest 183,600 in Advtech on August 28, 2024 and sell it today you would earn a total of 132,900 from holding Advtech or generate 72.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Growthpoint Properties vs. Advtech
Performance |
Timeline |
Growthpoint Properties |
Advtech |
Growthpoint Properties and Advtech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Growthpoint Properties and Advtech
The main advantage of trading using opposite Growthpoint Properties and Advtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Advtech 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 Advtech will offset losses from the drop in Advtech's long position.Growthpoint Properties vs. CA Sales Holdings | Growthpoint Properties vs. Harmony Gold Mining | Growthpoint Properties vs. British American Tobacco | Growthpoint Properties vs. HomeChoice Investments |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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