Correlation Between Growthpoint Properties and Schroder European
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Schroder European 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 Schroder European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Schroder European Real, you can compare the effects of market volatilities on Growthpoint Properties and Schroder European 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 Schroder European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Schroder European.
Diversification Opportunities for Growthpoint Properties and Schroder European
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Growthpoint and Schroder is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Schroder European Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder European Real 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 Schroder European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder European Real has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Schroder European go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Schroder European
Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 0.33 times more return on investment than Schroder European. However, Growthpoint Properties is 3.04 times less risky than Schroder European. It trades about 0.0 of its potential returns per unit of risk. Schroder European Real is currently generating about -0.22 per unit of risk. If you would invest 132,200 in Growthpoint Properties on September 4, 2024 and sell it today you would lose (100.00) from holding Growthpoint Properties or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Growthpoint Properties vs. Schroder European Real
Performance |
| Timeline |
| Growthpoint Properties |
| Schroder European Real |
Growthpoint Properties and Schroder European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Schroder European
The main advantage of trading using opposite Growthpoint Properties and Schroder European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Schroder European 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 Schroder European will offset losses from the drop in Schroder European's long position.| Growthpoint Properties vs. Emira Property | Growthpoint Properties vs. Dipula Income | Growthpoint Properties vs. Safari Investments RSA |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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