Correlation Between ABSA Bank and Afine Investments
Can any of the company-specific risk be diversified away by investing in both ABSA Bank and Afine Investments 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 ABSA Bank and Afine Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABSA Bank Limited and Afine Investments, you can compare the effects of market volatilities on ABSA Bank and Afine Investments 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 Bank with a short position of Afine Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABSA Bank and Afine Investments.
Diversification Opportunities for ABSA Bank and Afine Investments
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABSA and Afine is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ABSA Bank Limited and Afine Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afine Investments and ABSA Bank 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 Bank Limited are associated (or correlated) with Afine Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afine Investments has no effect on the direction of ABSA Bank i.e., ABSA Bank and Afine Investments go up and down completely randomly.
Pair Corralation between ABSA Bank and Afine Investments
If you would invest 8,549,900 in ABSA Bank Limited on August 24, 2024 and sell it today you would earn a total of 160,200 from holding ABSA Bank Limited or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABSA Bank Limited vs. Afine Investments
Performance |
| Timeline |
| ABSA Bank Limited |
| Afine Investments |
ABSA Bank and Afine Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABSA Bank and Afine Investments
The main advantage of trading using opposite ABSA Bank and Afine Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABSA Bank position performs unexpectedly, Afine Investments 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 Afine Investments will offset losses from the drop in Afine Investments' long position.| ABSA Bank vs. Allied Electronics | ABSA Bank vs. Astral Foods | ABSA Bank vs. Trematon Capital Investments | ABSA Bank vs. Astoria Investments |
| Afine Investments vs. Schroder European Real | Afine Investments vs. Centaur Bci Balanced | Afine Investments vs. Sabvest Capital | Afine Investments 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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