Correlation Between Growthpoint Properties and 1nvest High

Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and 1nvest High 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 1nvest High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Growthpoint Properties and 1nvest High Equity, you can compare the effects of market volatilities on Growthpoint Properties and 1nvest High 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 1nvest High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and 1nvest High.

Diversification Opportunities for Growthpoint Properties and 1nvest High

-0.19

Correlation Coefficient

Growthpoint Properties  1nvest High

Good diversification

The 3 months correlation between Growthpoint and 1nvest is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and 1nvest High Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1nvest High Equity 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 1nvest High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1nvest High Equity has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and 1nvest High go up and down completely randomly.

Pair Corralation between Growthpoint Properties and 1nvest High

Assuming the 90 days trading horizon Growthpoint Properties is expected to generate 1.21 times less return on investment than 1nvest High. In addition to that, Growthpoint Properties is 2.34 times more volatile than 1nvest High Equity. It trades about 0.02 of its total potential returns per unit of risk. 1nvest High Equity is currently generating about 0.05 per unit of volatility. If you would invest  121.00  in 1nvest High Equity on October 9, 2024 and sell it today you would earn a total of  19.00  from holding 1nvest High Equity or generate 15.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Growthpoint Properties  vs.  1nvest High Equity

Growthpoint Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growthpoint Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Growthpoint Properties is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

1nvest High Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1nvest High Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 1nvest High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Growthpoint Properties and 1nvest High

The main advantage of trading using opposite Growthpoint Properties and 1nvest High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, 1nvest High 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 1nvest High will offset losses from the drop in 1nvest High's long position.

The idea behind Growthpoint Properties and 1nvest High Equity 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.