Correlation Between Bank Rakyat and Acciona SA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Acciona SA 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 Acciona SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Acciona SA, you can compare the effects of market volatilities on Bank Rakyat and Acciona SA 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 Acciona SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Acciona SA.
Diversification Opportunities for Bank Rakyat and Acciona SA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Acciona is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA 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 Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Acciona SA go up and down completely randomly.
Pair Corralation between Bank Rakyat and Acciona SA
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Acciona SA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.47 times less risky than Acciona SA. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Acciona SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 13,972 in Acciona SA on September 1, 2024 and sell it today you would lose (1,542) from holding Acciona SA or give up 11.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 65.06% |
| Values | Daily Returns |
Bank Rakyat vs. Acciona SA
Performance |
| Timeline |
| Bank Rakyat |
| Acciona SA |
Bank Rakyat and Acciona SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Acciona SA
The main advantage of trading using opposite Bank Rakyat and Acciona SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Acciona SA 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 Acciona SA will offset losses from the drop in Acciona SA's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Delhi Bank Corp | Bank Rakyat vs. Uwharrie Capital Corp |
| Acciona SA vs. Orion Group Holdings | Acciona SA vs. Agrify Corp | Acciona SA vs. Matrix Service Co | Acciona SA vs. MYR Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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