Correlation Between Resource Base and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Resource Base and Growthpoint 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 Resource Base and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Base and Growthpoint Properties Australia, you can compare the effects of market volatilities on Resource Base and Growthpoint 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 Resource Base with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Base and Growthpoint Properties.
Diversification Opportunities for Resource Base and Growthpoint Properties
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Resource and Growthpoint is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Resource Base and Growthpoint Properties Austral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Resource Base 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 Resource Base are associated (or correlated) with Growthpoint Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growthpoint Properties has no effect on the direction of Resource Base i.e., Resource Base and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Resource Base and Growthpoint Properties
Assuming the 90 days trading horizon Resource Base is expected to generate 32.82 times less return on investment than Growthpoint Properties. But when comparing it to its historical volatility, Resource Base is 1.34 times less risky than Growthpoint Properties. It trades about 0.0 of its potential returns per unit of risk. Growthpoint Properties Australia is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 237.00 in Growthpoint Properties Australia on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Growthpoint Properties Australia or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resource Base vs. Growthpoint Properties Austral
Performance |
| Timeline |
| Resource Base |
| Growthpoint Properties |
Resource Base and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Base and Growthpoint Properties
The main advantage of trading using opposite Resource Base and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Base position performs unexpectedly, Growthpoint 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 Growthpoint Properties will offset losses from the drop in Growthpoint Properties' long position.| Resource Base vs. Diversified United Investment | Resource Base vs. Auctus Alternative Investments | Resource Base vs. MFF Capital Investments | Resource Base vs. Mirrabooka Investments |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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