Correlation Between Bank Rakyat and Big Ridge
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Big Ridge 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 Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Big Ridge Gold, you can compare the effects of market volatilities on Bank Rakyat and Big Ridge 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 Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Big Ridge.
Diversification Opportunities for Bank Rakyat and Big Ridge
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Big is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold 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 Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Big Ridge go up and down completely randomly.
Pair Corralation between Bank Rakyat and Big Ridge
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.25 times more return on investment than Big Ridge. However, Bank Rakyat is 3.98 times less risky than Big Ridge. It trades about -0.29 of its potential returns per unit of risk. Big Ridge Gold is currently generating about -0.08 per unit of risk. If you would invest 1,521 in Bank Rakyat on August 25, 2024 and sell it today you would lose (158.00) from holding Bank Rakyat or give up 10.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Big Ridge Gold
Performance |
| Timeline |
| Bank Rakyat |
| Big Ridge Gold |
Bank Rakyat and Big Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Big Ridge
The main advantage of trading using opposite Bank Rakyat and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.| Bank Rakyat vs. Standard Bank Group | Bank Rakyat vs. PSB Holdings | Bank Rakyat vs. United Overseas Bank | Bank Rakyat vs. Turkiye Garanti Bankasi |
| Big Ridge vs. Minnova Corp | Big Ridge vs. Argo Gold | Big Ridge vs. Advance Gold Corp | Big Ridge vs. Blue Star Gold |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |