Correlation Between ABSA NEW and ABSA BANK
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By analyzing existing cross correlation between ABSA NEW GOLD and ABSA BANK OF, you can compare the effects of market volatilities on ABSA NEW and ABSA BANK 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 NEW with a short position of ABSA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABSA NEW and ABSA BANK.
Diversification Opportunities for ABSA NEW and ABSA BANK
Poor diversification
The 3 months correlation between ABSA and ABSA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ABSA NEW GOLD and ABSA BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABSA BANK and ABSA NEW 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 NEW GOLD are associated (or correlated) with ABSA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABSA BANK has no effect on the direction of ABSA NEW i.e., ABSA NEW and ABSA BANK go up and down completely randomly.
Pair Corralation between ABSA NEW and ABSA BANK
Assuming the 90 days trading horizon ABSA NEW is expected to generate 1.12 times less return on investment than ABSA BANK. But when comparing it to its historical volatility, ABSA NEW GOLD is 1.1 times less risky than ABSA BANK. It trades about 0.08 of its potential returns per unit of risk. ABSA BANK OF is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,145 in ABSA BANK OF on September 2, 2024 and sell it today you would earn a total of 350.00 from holding ABSA BANK OF or generate 30.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABSA NEW GOLD vs. ABSA BANK OF
Performance |
| Timeline |
| ABSA NEW GOLD |
| ABSA BANK |
ABSA NEW and ABSA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABSA NEW and ABSA BANK
The main advantage of trading using opposite ABSA NEW and ABSA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABSA NEW position performs unexpectedly, ABSA BANK 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 BANK will offset losses from the drop in ABSA BANK's long position.| ABSA NEW vs. DIAMOND TRUST BANK | ABSA NEW vs. CENTUM INVESTMENT PANY | ABSA NEW vs. CIC INSURANCE GROUP | ABSA NEW vs. ABSA BANK OF |
| ABSA BANK vs. DIAMOND TRUST BANK | ABSA BANK vs. CENTUM INVESTMENT PANY | ABSA BANK vs. HOME AFRIKA LTD | ABSA BANK vs. EAST AFRICAN BREWERIES |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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