Correlation Between Bank Rakyat and Oak Ridge
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Oak 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 Oak 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 Oak Ridge Financial, you can compare the effects of market volatilities on Bank Rakyat and Oak 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 Oak Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Oak Ridge.
Diversification Opportunities for Bank Rakyat and Oak Ridge
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Oak is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial 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 Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Oak Ridge go up and down completely randomly.
Pair Corralation between Bank Rakyat and Oak Ridge
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Oak Ridge. In addition to that, Bank Rakyat is 1.29 times more volatile than Oak Ridge Financial. It trades about -0.01 of its total potential returns per unit of risk. Oak Ridge Financial is currently generating about 0.13 per unit of volatility. If you would invest 1,670 in Oak Ridge Financial on September 1, 2024 and sell it today you would earn a total of 405.00 from holding Oak Ridge Financial or generate 24.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank Rakyat vs. Oak Ridge Financial
Performance |
| Timeline |
| Bank Rakyat |
| Oak Ridge Financial |
Bank Rakyat and Oak Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Oak Ridge
The main advantage of trading using opposite Bank Rakyat and Oak Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Oak 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 Oak Ridge will offset losses from the drop in Oak Ridge'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 |
| Oak Ridge vs. HUMANA INC | Oak Ridge vs. SCOR PK | Oak Ridge vs. Aquagold International | Oak Ridge vs. Thrivent High Yield |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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