Correlation Between Growthpoint Properties and Thungela Resources
Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Thungela Resources 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 Thungela Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Thungela Resources Limited, you can compare the effects of market volatilities on Growthpoint Properties and Thungela Resources 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 Thungela Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Thungela Resources.
Diversification Opportunities for Growthpoint Properties and Thungela Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growthpoint and Thungela is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Thungela Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thungela Resources 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 Thungela Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thungela Resources has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Thungela Resources go up and down completely randomly.
Pair Corralation between Growthpoint Properties and Thungela Resources
Assuming the 90 days trading horizon Growthpoint Properties is expected to under-perform the Thungela Resources. But the stock apears to be less risky and, when comparing its historical volatility, Growthpoint Properties is 1.69 times less risky than Thungela Resources. The stock trades about -0.07 of its potential returns per unit of risk. The Thungela Resources Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,274,100 in Thungela Resources Limited on August 25, 2024 and sell it today you would earn a total of 102,600 from holding Thungela Resources Limited or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growthpoint Properties vs. Thungela Resources Limited
Performance |
| Timeline |
| Growthpoint Properties |
| Thungela Resources |
Growthpoint Properties and Thungela Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growthpoint Properties and Thungela Resources
The main advantage of trading using opposite Growthpoint Properties and Thungela Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Thungela Resources 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 Thungela Resources will offset losses from the drop in Thungela Resources' long position.| Growthpoint Properties vs. ABSA Bank Limited | Growthpoint Properties vs. Reinet Investments SCA | Growthpoint Properties vs. Advtech | Growthpoint Properties vs. Zeder Investments |
| Thungela Resources vs. Centaur Bci Balanced | Thungela Resources vs. Growthpoint Properties | Thungela Resources vs. Bowler Metcalf | Thungela Resources vs. Shoprite Holdings |
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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