Correlation Between United Tennessee and Absa Group
Can any of the company-specific risk be diversified away by investing in both United Tennessee 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 United Tennessee and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Tennessee Bankshares and Absa Group Limited, you can compare the effects of market volatilities on United Tennessee 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 United Tennessee with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Tennessee and Absa Group.
Diversification Opportunities for United Tennessee and Absa Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Absa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Tennessee Bankshares 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 United Tennessee 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 United Tennessee Bankshares 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 United Tennessee i.e., United Tennessee and Absa Group go up and down completely randomly.
Pair Corralation between United Tennessee and Absa Group
Given the investment horizon of 90 days United Tennessee Bankshares is expected to under-perform the Absa Group. But the otc stock apears to be less risky and, when comparing its historical volatility, United Tennessee Bankshares is 2.73 times less risky than Absa Group. The otc stock trades about -0.01 of its potential returns per unit of risk. The Absa Group Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Absa Group Limited on October 21, 2024 and sell it today you would earn a total of 475.00 from holding Absa Group Limited or generate 141.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 24.4% |
| Values | Daily Returns |
United Tennessee Bankshares vs. Absa Group Limited
Performance |
| Timeline |
| United Tennessee Ban |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Absa Group Limited |
United Tennessee and Absa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Tennessee and Absa Group
The main advantage of trading using opposite United Tennessee and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Tennessee 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.| United Tennessee vs. United Bancorporation of | United Tennessee vs. Tri County Financial Group | United Tennessee vs. Quaint Oak 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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