Correlation Between Investar Holding and Absa Group
Can any of the company-specific risk be diversified away by investing in both Investar Holding 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 Investar Holding and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investar Holding Corp and Absa Group Limited, you can compare the effects of market volatilities on Investar Holding 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 Investar Holding with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investar Holding and Absa Group.
Diversification Opportunities for Investar Holding and Absa Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Investar and Absa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp 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 Investar Holding 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 Investar Holding Corp 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 Investar Holding i.e., Investar Holding and Absa Group go up and down completely randomly.
Pair Corralation between Investar Holding and Absa Group
Given the investment horizon of 90 days Investar Holding Corp is expected to generate 5.18 times more return on investment than Absa Group. However, Investar Holding is 5.18 times more volatile than Absa Group Limited. It trades about 0.09 of its potential returns per unit of risk. Absa Group Limited is currently generating about 0.08 per unit of risk. If you would invest 1,474 in Investar Holding Corp on October 13, 2024 and sell it today you would earn a total of 394.00 from holding Investar Holding Corp or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investar Holding Corp vs. Absa Group Limited
Performance |
| Timeline |
| Investar Holding Corp |
| Absa Group Limited |
Investar Holding and Absa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investar Holding and Absa Group
The main advantage of trading using opposite Investar Holding and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding 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.| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest Bancorp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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