Correlation Between Growthpoint Properties and Sab Zenzele
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Sab Zenzele 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 Sab Zenzele into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Sab Zenzele Kabili, you can compare the effects of market volatilities on Growthpoint Properties and Sab Zenzele 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 Sab Zenzele. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Sab Zenzele.
Diversification Opportunities for Growthpoint Properties and Sab Zenzele
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growthpoint and Sab is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Sab Zenzele Kabili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sab Zenzele Kabili 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 Sab Zenzele. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sab Zenzele Kabili has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Sab Zenzele go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Sab Zenzele
Assuming the 90 days trading horizon Growthpoint Properties is expected to under-perform the Sab Zenzele. But the stock apears to be less risky and, when comparing its historical volatility, Growthpoint Properties is 2.49 times less risky than Sab Zenzele. The stock trades about -0.03 of its potential returns per unit of risk. The Sab Zenzele Kabili is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 375,500 in Sab Zenzele Kabili on September 2, 2024 and sell it today you would lose (15,500) from holding Sab Zenzele Kabili or give up 4.13% 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. Sab Zenzele Kabili
Performance |
| Timeline |
| Growthpoint Properties |
| Sab Zenzele Kabili |
Growthpoint Properties and Sab Zenzele Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Sab Zenzele
The main advantage of trading using opposite Growthpoint Properties and Sab Zenzele positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Sab Zenzele 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 Sab Zenzele will offset losses from the drop in Sab Zenzele's long position.The idea behind Growthpoint Properties and Sab Zenzele Kabili pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sab Zenzele vs. Sasol Ltd Bee | Sab Zenzele vs. Centaur Bci Balanced | Sab Zenzele vs. Sabvest Capital | Sab Zenzele vs. Growthpoint Properties |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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