Correlation Between Ayo Technology and Growthpoint Properties

Can any of the company-specific risk be diversified away by investing in both Ayo Technology 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 Ayo Technology and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ayo Technology Solutions and Growthpoint Properties, you can compare the effects of market volatilities on Ayo Technology 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 Ayo Technology with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayo Technology and Growthpoint Properties.

Diversification Opportunities for Ayo Technology and Growthpoint Properties

-0.19

Correlation Coefficient

Ayo Technology  Growthpoint Properties

Good diversification

The 3 months correlation between Ayo and Growthpoint is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ayo Technology Solutions and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Ayo Technology 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 Ayo Technology Solutions 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 Ayo Technology i.e., Ayo Technology and Growthpoint Properties go up and down completely randomly.

Pair Corralation between Ayo Technology and Growthpoint Properties

Assuming the 90 days trading horizon Ayo Technology Solutions is expected to under-perform the Growthpoint Properties. In addition to that, Ayo Technology is 3.94 times more volatile than Growthpoint Properties. It trades about -0.04 of its total potential returns per unit of risk. Growthpoint Properties is currently generating about 0.03 per unit of volatility. If you would invest  128,500  in Growthpoint Properties on December 25, 2024 and sell it today you would earn a total of  2,100  from holding Growthpoint Properties or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ayo Technology Solutions  vs.  Growthpoint Properties

Ayo Technology Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ayo Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Growthpoint Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Growthpoint Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Growthpoint Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ayo Technology and Growthpoint Properties

The main advantage of trading using opposite Ayo Technology and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayo Technology 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.

The idea behind Ayo Technology Solutions and Growthpoint Properties 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.