Correlation Between Bank Rakyat and Alset Capital
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Alset Capital 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 Bank Rakyat and Alset Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Alset Capital Acquisition, you can compare the effects of market volatilities on Bank Rakyat and Alset Capital 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 Bank Rakyat with a short position of Alset Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Alset Capital.
Diversification Opportunities for Bank Rakyat and Alset Capital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Alset is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Alset Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Capital Acquisition and Bank Rakyat 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 Bank Rakyat are associated (or correlated) with Alset Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Capital Acquisition has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Alset Capital go up and down completely randomly.
Pair Corralation between Bank Rakyat and Alset Capital
Assuming the 90 days horizon Bank Rakyat is expected to generate 129.75 times less return on investment than Alset Capital. But when comparing it to its historical volatility, Bank Rakyat is 6.94 times less risky than Alset Capital. It trades about 0.01 of its potential returns per unit of risk. Alset Capital Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Alset Capital Acquisition on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Alset Capital Acquisition or generate 131.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 17.58% |
| Values | Daily Returns |
Bank Rakyat vs. Alset Capital Acquisition
Performance |
| Timeline |
| Bank Rakyat |
| Alset Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Alset Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Alset Capital
The main advantage of trading using opposite Bank Rakyat and Alset Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Alset Capital 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 Alset Capital will offset losses from the drop in Alset Capital's long position.| Bank Rakyat vs. Israel Discount Bank | Bank Rakyat vs. Baraboo Bancorporation | Bank Rakyat vs. Danske Bank AS | Bank Rakyat vs. Jyske Bank AS |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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