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An absolute encoders reads a magnetization pattern of a scale or ring and then knows the excat postion exact position similar.
Incremental and absolute is similar to the difference between analog and digital.
From Netzers
Based on variable capacitance so factors such as temperature, moisture effect them but due to advances in Netzers technology encoders remain accurate.
Electrical Encoders provide absolute location and rely on A/D converters and software to correct and calibrate.
An electric field interacts with a rotor with a sinusoidal shaped 3D pattern that gives fine and coarse information. The field is "integrated over the full rotor area (hence “holistic”)". The signal is separated into Sine and Cosine output. Then a common channel processes the Sine and Cosine into the angle which is stable over time and temperature.
A holistic encoder takes into account the entire shape of the rotor instead of a small section is an optical encoder. This technology allows a high precise and accurate measurement.