Correlation Between Growthpoint Properties and Afrimat
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Afrimat 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 Afrimat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Afrimat, you can compare the effects of market volatilities on Growthpoint Properties and Afrimat 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 Afrimat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Afrimat.
Diversification Opportunities for Growthpoint Properties and Afrimat
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Growthpoint and Afrimat is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Afrimat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afrimat 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 Afrimat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afrimat has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Afrimat go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Afrimat
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.78 times more return on investment than Afrimat. However, Growthpoint Properties is 1.29 times less risky than Afrimat. It trades about 0.08 of its potential returns per unit of risk. Afrimat is currently generating about 0.05 per unit of risk. If you would invest 105,173 in Growthpoint Properties on September 12, 2024 and sell it today you would earn a total of 28,027 from holding Growthpoint Properties or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. Afrimat
Performance |
| Timeline |
| Growthpoint Properties |
| Afrimat |
Growthpoint Properties and Afrimat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Afrimat
The main advantage of trading using opposite Growthpoint Properties and Afrimat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Afrimat 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 Afrimat will offset losses from the drop in Afrimat's long position.| Growthpoint Properties vs. Brimstone Investment | Growthpoint Properties vs. Zeder Investments | Growthpoint Properties vs. Standard Bank Group | Growthpoint Properties vs. Deneb Investments |
| Afrimat vs. Sasol Ltd Bee | Afrimat vs. Centaur Bci Balanced | Afrimat vs. Sabvest Capital | Afrimat vs. Growthpoint Properties |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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