Correlation Between Reinet Investments and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Reinet Investments 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 Reinet Investments and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinet Investments SCA and Growthpoint Properties, you can compare the effects of market volatilities on Reinet Investments 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 Reinet Investments with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinet Investments and Growthpoint Properties.
Diversification Opportunities for Reinet Investments and Growthpoint Properties
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reinet and Growthpoint is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Reinet Investments SCA and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Reinet Investments 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 Reinet Investments SCA 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 Reinet Investments i.e., Reinet Investments and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Reinet Investments and Growthpoint Properties
Assuming the 90 days trading horizon Reinet Investments SCA is expected to generate 1.42 times more return on investment than Growthpoint Properties. However, Reinet Investments is 1.42 times more volatile than Growthpoint Properties. It trades about -0.04 of its potential returns per unit of risk. Growthpoint Properties is currently generating about -0.1 per unit of risk. If you would invest 5,000,300 in Reinet Investments SCA on November 6, 2024 and sell it today you would lose (258,200) from holding Reinet Investments SCA or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinet Investments SCA vs. Growthpoint Properties
Performance |
| Timeline |
| Reinet Investments SCA |
| Growthpoint Properties |
Reinet Investments and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinet Investments and Growthpoint Properties
The main advantage of trading using opposite Reinet Investments and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinet Investments 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.| Reinet Investments vs. Harmony Gold Mining | Reinet Investments vs. ABSA Bank Limited | Reinet Investments vs. Life Healthcare | Reinet Investments vs. MC Mining |
| Growthpoint Properties vs. Kap Industrial Holdings | Growthpoint Properties vs. Trematon Capital Investments | Growthpoint Properties vs. Copper 360 | Growthpoint Properties vs. HomeChoice 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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