Correlation Between American Public and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both American Public and BANK RAKYAT 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 American Public and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and BANK RAKYAT IND, you can compare the effects of market volatilities on American Public and BANK RAKYAT 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 American Public with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and BANK RAKYAT.
Diversification Opportunities for American Public and BANK RAKYAT
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and BANK is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND and American Public 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 American Public Education are associated (or correlated) with BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of American Public i.e., American Public and BANK RAKYAT go up and down completely randomly.
Pair Corralation between American Public and BANK RAKYAT
Assuming the 90 days horizon American Public Education is expected to generate 1.85 times more return on investment than BANK RAKYAT. However, American Public is 1.85 times more volatile than BANK RAKYAT IND. It trades about 0.05 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about 0.0 per unit of risk. If you would invest 1,200 in American Public Education on October 30, 2024 and sell it today you would earn a total of 840.00 from holding American Public Education or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. BANK RAKYAT IND
Performance |
| Timeline |
| American Public Education |
| BANK RAKYAT IND |
American Public and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and BANK RAKYAT
The main advantage of trading using opposite American Public and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| American Public vs. alstria office REIT AG | American Public vs. Sunstone Hotel Investors | American Public vs. HYATT HOTELS A | American Public vs. MAVEN WIRELESS SWEDEN |
| BANK RAKYAT vs. UNITED UTILITIES GR | BANK RAKYAT vs. Amkor Technology | BANK RAKYAT vs. Wayside Technology Group | BANK RAKYAT vs. Magnachip Semiconductor |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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