Correlation Between ABSA BANK and CO OPERATIVE
Can any of the company-specific risk be diversified away by investing in both ABSA BANK and CO OPERATIVE 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 CO OPERATIVE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABSA BANK OF and CO OPERATIVE BANK OF, you can compare the effects of market volatilities on ABSA BANK and CO OPERATIVE 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 CO OPERATIVE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABSA BANK and CO OPERATIVE.
Diversification Opportunities for ABSA BANK and CO OPERATIVE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABSA and CBKL is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ABSA BANK OF and CO OPERATIVE BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CO OPERATIVE BANK 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 OF are associated (or correlated) with CO OPERATIVE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CO OPERATIVE BANK has no effect on the direction of ABSA BANK i.e., ABSA BANK and CO OPERATIVE go up and down completely randomly.
Pair Corralation between ABSA BANK and CO OPERATIVE
Assuming the 90 days trading horizon ABSA BANK OF is expected to generate 0.95 times more return on investment than CO OPERATIVE. However, ABSA BANK OF is 1.05 times less risky than CO OPERATIVE. It trades about 0.04 of its potential returns per unit of risk. CO OPERATIVE BANK OF is currently generating about 0.03 per unit of risk. If you would invest 1,200 in ABSA BANK OF on August 24, 2024 and sell it today you would earn a total of 340.00 from holding ABSA BANK OF or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
ABSA BANK OF vs. CO OPERATIVE BANK OF
Performance |
| Timeline |
| ABSA BANK |
| CO OPERATIVE BANK |
ABSA BANK and CO OPERATIVE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABSA BANK and CO OPERATIVE
The main advantage of trading using opposite ABSA BANK and CO OPERATIVE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABSA BANK position performs unexpectedly, CO OPERATIVE 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 CO OPERATIVE will offset losses from the drop in CO OPERATIVE's long position.| ABSA BANK vs. EAST AFRICAN BREWERIES | ABSA BANK vs. KENYA RE INSURANCE PORATION | ABSA BANK vs. TOTALENERGIES MARKETING KENYA | ABSA BANK vs. STANDARD CHARTERED BANK |
| CO OPERATIVE vs. ABSA BANK OF | CO OPERATIVE vs. CIC INSURANCE GROUP | CO OPERATIVE vs. BRITISH AMERICAN TOBACCO | CO OPERATIVE vs. UCHUMI SUPERMARKET PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |