Correlation Between Bondbloxx ETF and Absa Group

Can any of the company-specific risk be diversified away by investing in both Bondbloxx ETF 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 Bondbloxx ETF and Absa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bondbloxx ETF Trust and Absa Group Limited, you can compare the effects of market volatilities on Bondbloxx ETF 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 Bondbloxx ETF with a short position of Absa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bondbloxx ETF and Absa Group.

Diversification Opportunities for Bondbloxx ETF and Absa Group

-0.12

Correlation Coefficient

Bondbloxx ETF  Absa Group

Good diversification

The 3 months correlation between Bondbloxx and Absa is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust 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 Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Bondbloxx ETF i.e., Bondbloxx ETF and Absa Group go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Absa Group

If you would invest  4,897  in Bondbloxx ETF Trust on September 17, 2024 and sell it today you would earn a total of  18.00  from holding Bondbloxx ETF Trust or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Absa Group Limited

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Absa Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Absa Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Absa Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bondbloxx ETF and Absa Group

The main advantage of trading using opposite Bondbloxx ETF and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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 Bondbloxx ETF Trust 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.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.