Correlation Between Copper 360 and Absa
Can any of the company-specific risk be diversified away by investing in both Copper 360 and Absa 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 Copper 360 and Absa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Copper 360 and Absa Group, you can compare the effects of market volatilities on Copper 360 and Absa 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 Copper 360 with a short position of Absa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copper 360 and Absa.
Diversification Opportunities for Copper 360 and Absa
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Copper and Absa is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Copper 360 and Absa Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Group and Copper 360 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 Copper 360 are associated (or correlated) with Absa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Group has no effect on the direction of Copper 360 i.e., Copper 360 and Absa go up and down completely randomly.
Pair Corralation between Copper 360 and Absa
Assuming the 90 days trading horizon Copper 360 is expected to generate 83.27 times more return on investment than Absa. However, Copper 360 is 83.27 times more volatile than Absa Group. It trades about 0.12 of its potential returns per unit of risk. Absa Group is currently generating about 0.04 per unit of risk. If you would invest 46,800 in Copper 360 on September 2, 2024 and sell it today you would lose (17,800) from holding Copper 360 or give up 38.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.15% |
| Values | Daily Returns |
Copper 360 vs. Absa Group
Performance |
| Timeline |
| Copper 360 |
| Absa Group |
Copper 360 and Absa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Copper 360 and Absa
The main advantage of trading using opposite Copper 360 and Absa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copper 360 position performs unexpectedly, Absa 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 will offset losses from the drop in Absa's long position.| Copper 360 vs. Advtech | Copper 360 vs. Reinet Investments SCA | Copper 360 vs. Lesaka Technologies | Copper 360 vs. Zeder Investments |
| Absa vs. eMedia Holdings Limited | Absa vs. We Buy Cars | Absa vs. Frontier Transport Holdings | Absa vs. HomeChoice Investments |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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