Correlation Between Farmers Bancorp and Absa Group
Can any of the company-specific risk be diversified away by investing in both Farmers Bancorp and Absa Group 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 Farmers Bancorp and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Bancorp and Absa Group Limited, you can compare the effects of market volatilities on Farmers Bancorp and Absa Group 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 Farmers Bancorp with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bancorp and Absa Group.
Diversification Opportunities for Farmers Bancorp and Absa Group
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and Absa is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Bancorp and Absa Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Group Limited and Farmers Bancorp 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 Farmers Bancorp are associated (or correlated) with Absa Group. 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 Limited has no effect on the direction of Farmers Bancorp i.e., Farmers Bancorp and Absa Group go up and down completely randomly.
Pair Corralation between Farmers Bancorp and Absa Group
If you would invest 3,300 in Farmers Bancorp on September 2, 2024 and sell it today you would earn a total of 250.00 from holding Farmers Bancorp or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmers Bancorp vs. Absa Group Limited
Performance |
| Timeline |
| Farmers Bancorp |
| Absa Group Limited |
Farmers Bancorp and Absa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bancorp and Absa Group
The main advantage of trading using opposite Farmers Bancorp and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bancorp position performs unexpectedly, Absa Group 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 Group will offset losses from the drop in Absa Group's long position.| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
| Absa Group vs. Piraeus Bank SA | Absa Group vs. Turkiye Garanti Bankasi | Absa Group vs. Uwharrie Capital Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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