Correlation Between Bank Rakyat and AXA SA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and AXA 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 AXA 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 AXA SA, you can compare the effects of market volatilities on Bank Rakyat and AXA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and AXA SA.
Diversification Opportunities for Bank Rakyat and AXA SA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and AXA is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and AXA SA go up and down completely randomly.
Pair Corralation between Bank Rakyat and AXA SA
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the AXA SA. In addition to that, Bank Rakyat is 1.12 times more volatile than AXA SA. It trades about -0.43 of its total potential returns per unit of risk. AXA SA is currently generating about -0.28 per unit of volatility. If you would invest 3,850 in AXA SA on August 24, 2024 and sell it today you would lose (299.00) from holding AXA SA or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank Rakyat vs. AXA SA
Performance |
| Timeline |
| Bank Rakyat |
| AXA SA |
Bank Rakyat and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and AXA SA
The main advantage of trading using opposite Bank Rakyat and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, AXA 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 AXA SA will offset losses from the drop in AXA SA's long position.| Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group | Bank Rakyat vs. Bank Central Asia | Bank Rakyat vs. PSB Holdings |
| AXA SA vs. Assicurazioni Generali SpA | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. Arch Capital 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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