Correlation Between Bank Rakyat and BrainChip Holdings
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and BrainChip Holdings 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 BrainChip Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and BrainChip Holdings, you can compare the effects of market volatilities on Bank Rakyat and BrainChip Holdings 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 BrainChip Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and BrainChip Holdings.
Diversification Opportunities for Bank Rakyat and BrainChip Holdings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and BrainChip is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and BrainChip Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrainChip Holdings 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 BrainChip Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrainChip Holdings has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and BrainChip Holdings go up and down completely randomly.
Pair Corralation between Bank Rakyat and BrainChip Holdings
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the BrainChip Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 3.56 times less risky than BrainChip Holdings. The pink sheet trades about -0.32 of its potential returns per unit of risk. The BrainChip Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 662.00 in BrainChip Holdings on September 3, 2024 and sell it today you would lose (32.00) from holding BrainChip Holdings or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. BrainChip Holdings
Performance |
| Timeline |
| Bank Rakyat |
| BrainChip Holdings |
Bank Rakyat and BrainChip Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and BrainChip Holdings
The main advantage of trading using opposite Bank Rakyat and BrainChip Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, BrainChip Holdings 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 BrainChip Holdings will offset losses from the drop in BrainChip Holdings' 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 |
| BrainChip Holdings vs. Skywater Technology | BrainChip Holdings vs. Everspin Technologies | BrainChip Holdings vs. 4DS Memory Limited | BrainChip Holdings vs. Weebit Nano Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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