Correlation Between Absa Multi and Absa Prudential
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By analyzing existing cross correlation between Absa Multi Managed and Absa Prudential, you can compare the effects of market volatilities on Absa Multi and Absa Prudential 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 Absa Multi with a short position of Absa Prudential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absa Multi and Absa Prudential.
Diversification Opportunities for Absa Multi and Absa Prudential
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Absa and Absa is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Absa Multi Managed and Absa Prudential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Prudential and Absa Multi 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 Absa Multi Managed are associated (or correlated) with Absa Prudential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Prudential has no effect on the direction of Absa Multi i.e., Absa Multi and Absa Prudential go up and down completely randomly.
Pair Corralation between Absa Multi and Absa Prudential
Assuming the 90 days trading horizon Absa Multi Managed is expected to generate 1.19 times more return on investment than Absa Prudential. However, Absa Multi is 1.19 times more volatile than Absa Prudential. It trades about 0.3 of its potential returns per unit of risk. Absa Prudential is currently generating about 0.3 per unit of risk. If you would invest 252.00 in Absa Multi Managed on September 5, 2024 and sell it today you would earn a total of 7.00 from holding Absa Multi Managed or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absa Multi Managed vs. Absa Prudential
Performance |
| Timeline |
| Absa Multi Managed |
| Absa Prudential |
Absa Multi and Absa Prudential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absa Multi and Absa Prudential
The main advantage of trading using opposite Absa Multi and Absa Prudential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absa Multi position performs unexpectedly, Absa Prudential 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 Absa Prudential will offset losses from the drop in Absa Prudential's long position.| Absa Multi vs. Absa Multi managed Absolute | Absa Multi vs. Absa Prudential | Absa Multi vs. Absa Multi Managed | Absa Multi vs. Absa Multi Managed |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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