Correlation Between Benchmark Bankshares and Absa Group

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

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

Diversification Opportunities for Benchmark Bankshares and Absa Group

0.7

Correlation Coefficient

Benchmark Bankshares  Absa Group

Poor diversification

The 3 months correlation between Benchmark and Absa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark 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 Benchmark Bankshares 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 Benchmark 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 Benchmark Bankshares i.e., Benchmark Bankshares and Absa Group go up and down completely randomly.

Pair Corralation between Benchmark Bankshares and Absa Group

Given the investment horizon of 90 days Benchmark Bankshares is expected to generate 1.12 times more return on investment than Absa Group. However, Benchmark Bankshares is 1.12 times more volatile than Absa Group Limited. It trades about 0.29 of its potential returns per unit of risk. Absa Group Limited is currently generating about 0.12 per unit of risk. If you would invest  2,806  in Benchmark Bankshares on July 17, 2025 and sell it today you would earn a total of  444.00  from holding Benchmark Bankshares or generate 15.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Benchmark Bankshares  vs.  Absa Group Limited

Benchmark Bankshares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Bankshares are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Benchmark Bankshares displayed solid returns over the last few months and may actually be approaching a breakup point.

Absa Group Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Absa Group Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. 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 Benchmark Bankshares and Absa Group

The main advantage of trading using opposite Benchmark Bankshares and Absa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Bankshares 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 Benchmark Bankshares 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.