Correlation Between Bank Rakyat and Bâloise Holding
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Bâloise Holding 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 Bâloise Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Bloise Holding AG, you can compare the effects of market volatilities on Bank Rakyat and Bâloise Holding 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 Bâloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Bâloise Holding.
Diversification Opportunities for Bank Rakyat and Bâloise Holding
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Bâloise is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Bloise Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloise Holding AG 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 Bâloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloise Holding AG has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Bâloise Holding go up and down completely randomly.
Pair Corralation between Bank Rakyat and Bâloise Holding
If you would invest 20,118 in Bloise Holding AG on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Bloise Holding AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Bloise Holding AG
Performance |
| Timeline |
| Bank Rakyat |
| Bloise Holding AG |
Bank Rakyat and Bâloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Bâloise Holding
The main advantage of trading using opposite Bank Rakyat and Bâloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Bâloise Holding 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 Bâloise Holding will offset losses from the drop in Bâloise Holding's long position.The idea behind Bank Rakyat and Bloise Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bâloise Holding vs. Berkshire Hathaway | Bâloise Holding vs. American International Group | Bâloise Holding vs. Arch Capital Group | Bâloise Holding vs. Sun Life Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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