Correlation Between ABSA NEW and EQUITY GROUP
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By analyzing existing cross correlation between ABSA NEW GOLD and EQUITY GROUP HOLDINGS, you can compare the effects of market volatilities on ABSA NEW and EQUITY 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 ABSA NEW with a short position of EQUITY GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABSA NEW and EQUITY GROUP.
Diversification Opportunities for ABSA NEW and EQUITY GROUP
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABSA and EQUITY is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ABSA NEW GOLD and EQUITY GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQUITY GROUP HOLDINGS 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 EQUITY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQUITY GROUP HOLDINGS has no effect on the direction of ABSA NEW i.e., ABSA NEW and EQUITY GROUP go up and down completely randomly.
Pair Corralation between ABSA NEW and EQUITY GROUP
Assuming the 90 days trading horizon ABSA NEW GOLD is expected to generate 1.04 times more return on investment than EQUITY GROUP. However, ABSA NEW is 1.04 times more volatile than EQUITY GROUP HOLDINGS. It trades about 0.21 of its potential returns per unit of risk. EQUITY GROUP HOLDINGS is currently generating about -0.16 per unit of risk. If you would invest 302,500 in ABSA NEW GOLD on September 4, 2024 and sell it today you would earn a total of 19,500 from holding ABSA NEW GOLD or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABSA NEW GOLD vs. EQUITY GROUP HOLDINGS
Performance |
| Timeline |
| ABSA NEW GOLD |
| EQUITY GROUP HOLDINGS |
ABSA NEW and EQUITY GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABSA NEW and EQUITY GROUP
The main advantage of trading using opposite ABSA NEW and EQUITY GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABSA NEW position performs unexpectedly, EQUITY 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 EQUITY GROUP will offset losses from the drop in EQUITY GROUP's long position.| ABSA NEW vs. EQUITY GROUP HOLDINGS | ABSA NEW vs. LONGHORN PUBLISHERS LTD | ABSA NEW vs. SAFARICOM PLC | ABSA NEW vs. ABSA BANK OF |
| EQUITY GROUP vs. HOME AFRIKA LTD | EQUITY GROUP vs. CIC INSURANCE GROUP | EQUITY GROUP vs. HOMEBOYZ ENTERTAINMENT PLC | EQUITY GROUP vs. CARBACID INVESTMENTS LTD |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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