Correlation Between Abacus Life, and National Rural

Can any of the company-specific risk be diversified away by investing in both Abacus Life, and National Rural 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 Abacus Life, and National Rural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abacus Life, 9875 and National Rural Utilities, you can compare the effects of market volatilities on Abacus Life, and National Rural 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 Abacus Life, with a short position of National Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abacus Life, and National Rural.

Diversification Opportunities for Abacus Life, and National Rural

-0.46

Correlation Coefficient

Abacus Life,  National Rural

Very good diversification

The 3 months correlation between Abacus and National is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Abacus Life, 9875 and National Rural Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Rural Utilities and Abacus Life, 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 Abacus Life, 9875 are associated (or correlated) with National Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Rural Utilities has no effect on the direction of Abacus Life, i.e., Abacus Life, and National Rural go up and down completely randomly.

Pair Corralation between Abacus Life, and National Rural

Assuming the 90 days horizon Abacus Life, 9875 is expected to generate 2.88 times more return on investment than National Rural. However, Abacus Life, is 2.88 times more volatile than National Rural Utilities. It trades about 0.03 of its potential returns per unit of risk. National Rural Utilities is currently generating about 0.03 per unit of risk. If you would invest  2,265  in Abacus Life, 9875 on December 2, 2024 and sell it today you would earn a total of  367.00  from holding Abacus Life, 9875 or generate 16.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.68%
Values	Daily Returns

Abacus Life, 9875  vs.  National Rural Utilities

Abacus Life, 9875

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Life, 9875 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Abacus Life, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

National Rural Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Rural Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, National Rural is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Abacus Life, and National Rural

The main advantage of trading using opposite Abacus Life, and National Rural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abacus Life, position performs unexpectedly, National Rural 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 National Rural will offset losses from the drop in National Rural's long position.

The idea behind Abacus Life, 9875 and National Rural Utilities 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.