This paper introduces a self-calibratable absolute modular rotary encoder based on the equal division average method, designed to significantly enhance measurement accuracy and simplify installation. The proposed design integrates multiple optical sensors into the encoder stator Printed circuit board, enabling precise absolute position measurement through the averaging of sensors data. This multi-sensor approach compensates for alignment and installation inaccuracies, which are common issues in conventional modular encoders. To validate the design and predict encoder behaviour prior to manufacturing, a theoretical modelling of virtual optical sensors is performed. Based on experimentally collected cross-calibration data from a real optical encoder, this modelling framework enables to estimate the efficiency of self-calibration algorithm with sufficient accuracy and optimize the design and performance of the encoder. The obtained results confirm that the proposed measurement system significantly reduces error margin, improving the reliability and precision of position feedback. The initial position deviation of several hundreds of arcseconds might be reduced and kept below 8 arcseconds by using two or more additional optical sensors, even with the 0.5 mm misalignment of the encoder stator.