Correlation Between Growthpoint Properties and Deneb Investments
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Deneb Investments 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 Deneb Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Deneb Investments, you can compare the effects of market volatilities on Growthpoint Properties and Deneb Investments 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 Deneb Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Deneb Investments.
Diversification Opportunities for Growthpoint Properties and Deneb Investments
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growthpoint and Deneb is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Deneb Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deneb Investments 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 Deneb Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deneb Investments has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Deneb Investments go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Deneb Investments
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.69 times more return on investment than Deneb Investments. However, Growthpoint Properties is 1.45 times less risky than Deneb Investments. It trades about -0.02 of its potential returns per unit of risk. Deneb Investments is currently generating about -0.06 per unit of risk. If you would invest 131,400 in Growthpoint Properties on August 31, 2024 and sell it today you would lose (1,000.00) from holding Growthpoint Properties or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Growthpoint Properties vs. Deneb Investments
Performance |
| Timeline |
| Growthpoint Properties |
| Deneb Investments |
Growthpoint Properties and Deneb Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Deneb Investments
The main advantage of trading using opposite Growthpoint Properties and Deneb Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Deneb Investments 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 Deneb Investments will offset losses from the drop in Deneb Investments' long position.| Growthpoint Properties vs. Deneb Investments | Growthpoint Properties vs. Standard Bank Group | Growthpoint Properties vs. HomeChoice Investments | Growthpoint Properties vs. ABSA Bank Limited |
| Deneb Investments vs. Kap Industrial Holdings | Deneb Investments vs. Hosken Consolidated Investments | Deneb Investments vs. Centaur Bci Balanced | Deneb Investments vs. Sabvest Capital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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