Correlation Between Bank Rakyat and Ault Alliance
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Ault Alliance 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 Ault Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Ault Alliance, you can compare the effects of market volatilities on Bank Rakyat and Ault Alliance 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 Ault Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Ault Alliance.
Diversification Opportunities for Bank Rakyat and Ault Alliance
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ault is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Ault Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ault Alliance 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 Ault Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ault Alliance has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Ault Alliance go up and down completely randomly.
Pair Corralation between Bank Rakyat and Ault Alliance
If you would invest 21.00 in Ault Alliance on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Ault Alliance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Bank Rakyat vs. Ault Alliance
Performance |
| Timeline |
| Bank Rakyat |
| Ault Alliance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Bank Rakyat and Ault Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Ault Alliance
The main advantage of trading using opposite Bank Rakyat and Ault Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Ault Alliance 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 Ault Alliance will offset losses from the drop in Ault Alliance's long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
| Ault Alliance vs. Meiwu Technology Co | Ault Alliance vs. Reservoir Media | Ault Alliance vs. Weibo Corp | Ault Alliance vs. NETGEAR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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