Correlation Between Growthpoint Properties and Redefine Properties
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Redefine Properties 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 Redefine Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Redefine Properties, you can compare the effects of market volatilities on Growthpoint Properties and Redefine Properties 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 Redefine Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Redefine Properties.
Diversification Opportunities for Growthpoint Properties and Redefine Properties
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growthpoint and Redefine is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Redefine Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redefine Properties 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 Redefine Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redefine Properties has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Redefine Properties go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Redefine Properties
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.65 times more return on investment than Redefine Properties. However, Growthpoint Properties is 1.53 times less risky than Redefine Properties. It trades about 0.16 of its potential returns per unit of risk. Redefine Properties is currently generating about -0.04 per unit of risk. If you would invest 128,800 in Growthpoint Properties on September 15, 2024 and sell it today you would earn a total of 4,200 from holding Growthpoint Properties or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Growthpoint Properties vs. Redefine Properties
Performance |
| Timeline |
| Growthpoint Properties |
| Redefine Properties |
Growthpoint Properties and Redefine Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Redefine Properties
The main advantage of trading using opposite Growthpoint Properties and Redefine Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Redefine Properties 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 Redefine Properties will offset losses from the drop in Redefine Properties' long position.| Growthpoint Properties vs. Redefine Properties | Growthpoint Properties vs. Fortress Income | Growthpoint Properties vs. Emira Property | Growthpoint Properties vs. Dipula Income |
| Redefine Properties vs. Growthpoint Properties | Redefine Properties vs. Fortress Income | Redefine Properties vs. Emira Property | Redefine Properties vs. Dipula Income |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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