Correlation Between Growthpoint Properties and Bytes Technology
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Bytes Technology 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 Bytes Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Bytes Technology, you can compare the effects of market volatilities on Growthpoint Properties and Bytes Technology 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 Bytes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Bytes Technology.
Diversification Opportunities for Growthpoint Properties and Bytes Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growthpoint and Bytes is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Bytes Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bytes Technology 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 Bytes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bytes Technology has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Bytes Technology go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Bytes Technology
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.73 times more return on investment than Bytes Technology. However, Growthpoint Properties is 1.38 times less risky than Bytes Technology. It trades about -0.05 of its potential returns per unit of risk. Bytes Technology is currently generating about -0.11 per unit of risk. If you would invest 131,100 in Growthpoint Properties on October 22, 2024 and sell it today you would lose (5,400) from holding Growthpoint Properties or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. Bytes Technology
Performance |
| Timeline |
| Growthpoint Properties |
| Bytes Technology |
Growthpoint Properties and Bytes Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Bytes Technology
The main advantage of trading using opposite Growthpoint Properties and Bytes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Bytes Technology 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 Bytes Technology will offset losses from the drop in Bytes Technology's long position.| Growthpoint Properties vs. Astoria Investments | Growthpoint Properties vs. E Media Holdings | Growthpoint Properties vs. MC Mining | Growthpoint Properties vs. Safari Investments RSA |
| Bytes Technology vs. HomeChoice Investments | Bytes Technology vs. RCL Foods | Bytes Technology vs. Boxer Retail | Bytes Technology vs. Astral Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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