Correlation Between Logansport Financial and Absa Group
Can any of the company-specific risk be diversified away by investing in both Logansport Financial 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 Logansport Financial and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logansport Financial Corp and Absa Group Limited, you can compare the effects of market volatilities on Logansport Financial 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 Logansport Financial with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logansport Financial and Absa Group.
Diversification Opportunities for Logansport Financial and Absa Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Logansport and Absa is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Logansport Financial 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 Logansport Financial 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 Logansport Financial 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 Logansport Financial i.e., Logansport Financial and Absa Group go up and down completely randomly.
Pair Corralation between Logansport Financial and Absa Group
If you would invest 772.00 in Absa Group Limited on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Absa Group Limited or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Logansport Financial Corp vs. Absa Group Limited
Performance |
| Timeline |
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Absa Group Limited |
Logansport Financial and Absa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logansport Financial and Absa Group
The main advantage of trading using opposite Logansport Financial and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logansport Financial 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.The idea behind Logansport Financial Corp and Absa Group Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |