Correlation Between Growthpoint Properties and Brait SE

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Can any of the company-specific risk be diversified away by investing in both Growthpoint Properties and Brait SE 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 Brait SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growthpoint Properties and Brait SE, you can compare the effects of market volatilities on Growthpoint Properties and Brait SE 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 Brait SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growthpoint Properties and Brait SE.

Diversification Opportunities for Growthpoint Properties and Brait SE

-0.56
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Growthpoint and Brait is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Growthpoint Properties and Brait SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brait SE 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 Brait SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brait SE has no effect on the direction of Growthpoint Properties i.e., Growthpoint Properties and Brait SE go up and down completely randomly.

Pair Corralation between Growthpoint Properties and Brait SE

Assuming the 90 days trading horizon Growthpoint Properties is expected to under-perform the Brait SE. But the stock apears to be less risky and, when comparing its historical volatility, Growthpoint Properties is 2.0 times less risky than Brait SE. The stock trades about -0.04 of its potential returns per unit of risk. The Brait SE is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  15,700  in Brait SE on September 23, 2024 and sell it today you would earn a total of  4,300  from holding Brait SE or generate 27.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Growthpoint Properties  vs.  Brait SE

 Performance 
       Timeline  
Growthpoint Properties 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Brait SE 

Risk-Adjusted Performance

23 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Brait SE are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Brait SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Growthpoint Properties and Brait SE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Growthpoint Properties and Brait SE

The main advantage of trading using opposite Growthpoint Properties and Brait SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growthpoint Properties position performs unexpectedly, Brait SE 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 Brait SE will offset losses from the drop in Brait SE's long position.
The idea behind Growthpoint Properties and Brait SE 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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