Correlation Between Bank Rakyat and CEVA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and CEVA 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 CEVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and CEVA Inc, you can compare the effects of market volatilities on Bank Rakyat and CEVA 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 CEVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and CEVA.
Diversification Opportunities for Bank Rakyat and CEVA
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CEVA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc 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 CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and CEVA go up and down completely randomly.
Pair Corralation between Bank Rakyat and CEVA
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the CEVA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.85 times less risky than CEVA. The pink sheet trades about -0.3 of its potential returns per unit of risk. The CEVA Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,401 in CEVA Inc on August 26, 2024 and sell it today you would earn a total of 643.00 from holding CEVA Inc or generate 26.78% 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. CEVA Inc
Performance |
| Timeline |
| Bank Rakyat |
| CEVA Inc |
Bank Rakyat and CEVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and CEVA
The main advantage of trading using opposite Bank Rakyat and CEVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, CEVA 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 CEVA will offset losses from the drop in CEVA's long position.| Bank Rakyat vs. PSB Holdings | Bank Rakyat vs. United Overseas Bank | Bank Rakyat vs. Turkiye Garanti Bankasi |
| CEVA vs. MagnaChip Semiconductor | CEVA vs. MACOM Technology Solutions | CEVA vs. FormFactor | CEVA vs. MaxLinear |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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