Correlation Between Growthpoint Properties and MTN
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and MTN 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 MTN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and MTN Group, you can compare the effects of market volatilities on Growthpoint Properties and MTN 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 MTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and MTN.
Diversification Opportunities for Growthpoint Properties and MTN
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growthpoint and MTN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and MTN Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group 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 MTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and MTN go up and down completely randomly.
Pair Corralation between Growthpoint Properties and MTN
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.91 times more return on investment than MTN. However, Growthpoint Properties is 1.1 times less risky than MTN. It trades about -0.07 of its potential returns per unit of risk. MTN Group is currently generating about -0.3 per unit of risk. If you would invest 133,700 in Growthpoint Properties on August 27, 2024 and sell it today you would lose (2,700) from holding Growthpoint Properties or give up 2.02% 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. MTN Group
Performance |
| Timeline |
| Growthpoint Properties |
| MTN Group |
Growthpoint Properties and MTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and MTN
The main advantage of trading using opposite Growthpoint Properties and MTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, MTN 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 MTN will offset losses from the drop in MTN's long position.| Growthpoint Properties vs. Blue Label Telecoms | Growthpoint Properties vs. Harmony Gold Mining | Growthpoint Properties vs. HomeChoice Investments | Growthpoint Properties vs. City Lodge Hotels |
| MTN vs. CA Sales Holdings | MTN vs. Harmony Gold Mining | MTN vs. Trematon Capital Investments | MTN vs. Brimstone Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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