Correlation Between Andover Bancorp and Absa Group
Can any of the company-specific risk be diversified away by investing in both Andover Bancorp 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 Andover Bancorp and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andover Bancorp and Absa Group Limited, you can compare the effects of market volatilities on Andover Bancorp 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 Andover Bancorp with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andover Bancorp and Absa Group.
Diversification Opportunities for Andover Bancorp and Absa Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Andover and Absa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Andover Bancorp 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 Andover Bancorp 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 Andover Bancorp 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 Andover Bancorp i.e., Andover Bancorp and Absa Group go up and down completely randomly.
Pair Corralation between Andover Bancorp and Absa Group
Given the investment horizon of 90 days Andover Bancorp is expected to generate 4.77 times less return on investment than Absa Group. But when comparing it to its historical volatility, Andover Bancorp is 2.33 times less risky than Absa Group. It trades about 0.02 of its potential returns per unit of risk. Absa Group Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Absa Group Limited on December 2, 2024 and sell it today you would earn a total of 417.00 from holding Absa Group Limited or generate 105.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 28.48% |
Values | Daily Returns |
Andover Bancorp vs. Absa Group Limited
Performance |
Timeline |
Andover Bancorp |
Absa Group Limited |
Andover Bancorp and Absa Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Andover Bancorp and Absa Group
The main advantage of trading using opposite Andover Bancorp and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andover Bancorp 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 Andover Bancorp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Global Correlations Find global opportunities by holding instruments from different markets |