Correlation Between Growthpoint Properties and HomeChoice Investments
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and HomeChoice 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 HomeChoice 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 HomeChoice Investments, you can compare the effects of market volatilities on Growthpoint Properties and HomeChoice 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 HomeChoice Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and HomeChoice Investments.
Diversification Opportunities for Growthpoint Properties and HomeChoice Investments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Growthpoint and HomeChoice is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and HomeChoice Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeChoice 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 HomeChoice Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeChoice Investments has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and HomeChoice Investments go up and down completely randomly.
Pair Corralation between Growthpoint Properties and HomeChoice Investments
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.42 times more return on investment than HomeChoice Investments. However, Growthpoint Properties is 2.36 times less risky than HomeChoice Investments. It trades about -0.01 of its potential returns per unit of risk. HomeChoice Investments is currently generating about -0.09 per unit of risk. If you would invest 132,300 in Growthpoint Properties on August 24, 2024 and sell it today you would lose (600.00) from holding Growthpoint Properties or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. HomeChoice Investments
Performance |
| Timeline |
| Growthpoint Properties |
| HomeChoice Investments |
Growthpoint Properties and HomeChoice Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and HomeChoice Investments
The main advantage of trading using opposite Growthpoint Properties and HomeChoice Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, HomeChoice 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 HomeChoice Investments will offset losses from the drop in HomeChoice Investments' long position.| Growthpoint Properties vs. Master Drilling Group | Growthpoint Properties vs. Life Healthcare | Growthpoint Properties vs. Hosken Consolidated Investments | Growthpoint Properties vs. E Media Holdings |
| HomeChoice Investments vs. Sasol Ltd Bee | HomeChoice Investments vs. Centaur Bci Balanced | HomeChoice Investments vs. Sabvest Capital | HomeChoice Investments 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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