Correlation Between BOC Hong and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both BOC Hong 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 BOC Hong and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and Bank Rakyat, you can compare the effects of market volatilities on BOC Hong 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 BOC Hong with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and Bank Rakyat.
Diversification Opportunities for BOC Hong and Bank Rakyat
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BOC and Bank is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat and BOC Hong 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 BOC Hong Kong 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 has no effect on the direction of BOC Hong i.e., BOC Hong and Bank Rakyat go up and down completely randomly.
Pair Corralation between BOC Hong and Bank Rakyat
Assuming the 90 days horizon BOC Hong Kong is expected to generate 1.09 times more return on investment than Bank Rakyat. However, BOC Hong is 1.09 times more volatile than Bank Rakyat. It trades about -0.13 of its potential returns per unit of risk. Bank Rakyat is currently generating about -0.36 per unit of risk. If you would invest 6,549 in BOC Hong Kong on September 1, 2024 and sell it today you would lose (348.00) from holding BOC Hong Kong or give up 5.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOC Hong Kong vs. Bank Rakyat
Performance |
| Timeline |
| BOC Hong Kong |
| Bank Rakyat |
BOC Hong and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and Bank Rakyat
The main advantage of trading using opposite BOC Hong and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong 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.| BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Delhi Bank Corp | Bank Rakyat vs. Uwharrie Capital Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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