Correlation Between Growthpoint Properties and Investec Limited
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Investec Limited 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 Investec Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Investec Limited NON, you can compare the effects of market volatilities on Growthpoint Properties and Investec Limited 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 Investec Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Investec Limited.
Diversification Opportunities for Growthpoint Properties and Investec Limited
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growthpoint and Investec is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Investec Limited NON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Limited NON 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 Investec Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Limited NON has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Investec Limited go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Investec Limited
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 1.19 times more return on investment than Investec Limited. However, Growthpoint Properties is 1.19 times more volatile than Investec Limited NON. It trades about 0.02 of its potential returns per unit of risk. Investec Limited NON is currently generating about 0.0 per unit of risk. If you would invest 119,655 in Growthpoint Properties on August 31, 2024 and sell it today you would earn a total of 10,745 from holding Growthpoint Properties or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. Investec Limited NON
Performance |
| Timeline |
| Growthpoint Properties |
| Investec Limited NON |
Growthpoint Properties and Investec Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Investec Limited
The main advantage of trading using opposite Growthpoint Properties and Investec Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Investec Limited 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 Investec Limited will offset losses from the drop in Investec Limited's long position.| Growthpoint Properties vs. Deneb Investments | Growthpoint Properties vs. Standard Bank Group | Growthpoint Properties vs. HomeChoice Investments | Growthpoint Properties vs. ABSA Bank Limited |
| Investec Limited vs. Deneb Investments | Investec Limited vs. Bytes Technology | Investec Limited vs. RCL Foods | Investec Limited vs. African Media Entertainment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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