Correlation Between Growthpoint Properties and Argent

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

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

Diversification Opportunities for Growthpoint Properties and Argent

0.72

Correlation Coefficient

Growthpoint Properties  Argent

Poor diversification

The 3 months correlation between Growthpoint and Argent is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Argent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argent 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 Argent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argent has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Argent go up and down completely randomly.

Pair Corralation between Growthpoint Properties and Argent

Assuming the 90 days trading horizon Growthpoint Properties is expected to under-perform the Argent. But the stock apears to be less risky and, when comparing its historical volatility, Growthpoint Properties is 1.01 times less risky than Argent. The stock trades about -0.08 of its potential returns per unit of risk. The Argent is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  274,000  in Argent on December 4, 2024 and sell it today you would lose (16,000) from holding Argent or give up 5.84% of portfolio value over 90 days.

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

Growthpoint Properties  vs.  Argent

Growthpoint Properties

Risk-Adjusted Performance

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Argent

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Growthpoint Properties and Argent

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

The idea behind Growthpoint Properties and Argent 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.