Correlation Between Growthpoint Properties and Remgro
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Remgro 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 Remgro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Remgro, you can compare the effects of market volatilities on Growthpoint Properties and Remgro 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 Remgro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Remgro.
Diversification Opportunities for Growthpoint Properties and Remgro
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Growthpoint and Remgro is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Remgro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remgro 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 Remgro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remgro has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Remgro go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Remgro
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 1.38 times more return on investment than Remgro. However, Growthpoint Properties is 1.38 times more volatile than Remgro. It trades about -0.02 of its potential returns per unit of risk. Remgro is currently generating about -0.12 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. Remgro
Performance |
| Timeline |
| Growthpoint Properties |
| Remgro |
Growthpoint Properties and Remgro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Remgro
The main advantage of trading using opposite Growthpoint Properties and Remgro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Remgro 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 Remgro will offset losses from the drop in Remgro'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 |
| Remgro vs. Copper 360 | Remgro vs. Zeder Investments | Remgro vs. Trematon Capital Investments | Remgro vs. Advtech |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |