Correlation Between Absa Prudential and Absa Multi
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By analyzing existing cross correlation between Absa Prudential and Absa Multi Managed, you can compare the effects of market volatilities on Absa Prudential and Absa Multi 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 Prudential with a short position of Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absa Prudential and Absa Multi.
Diversification Opportunities for Absa Prudential and Absa Multi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Absa and Absa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Absa Prudential and Absa Multi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi Managed and Absa Prudential 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 Prudential are associated (or correlated) with Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi Managed has no effect on the direction of Absa Prudential i.e., Absa Prudential and Absa Multi go up and down completely randomly.
Pair Corralation between Absa Prudential and Absa Multi
Assuming the 90 days trading horizon Absa Prudential is expected to generate 1.18 times less return on investment than Absa Multi. But when comparing it to its historical volatility, Absa Prudential is 1.19 times less risky than Absa Multi. It trades about 0.3 of its potential returns per unit of risk. Absa Multi Managed is currently generating about 0.3 of returns per unit of risk over similar time horizon. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absa Prudential vs. Absa Multi Managed
Performance |
| Timeline |
| Absa Prudential |
| Absa Multi Managed |
Absa Prudential and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absa Prudential and Absa Multi
The main advantage of trading using opposite Absa Prudential and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absa Prudential position performs unexpectedly, Absa Multi 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 Multi will offset losses from the drop in Absa Multi's long position.| Absa Prudential vs. Sasol Ltd Bee | Absa Prudential vs. Centaur Bci Balanced | Absa Prudential vs. Sabvest Capital | Absa Prudential vs. Growthpoint Properties |
| Absa Multi vs. Sasol Ltd Bee | Absa Multi vs. Centaur Bci Balanced | Absa Multi vs. Sabvest Capital | Absa Multi vs. Growthpoint Properties |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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