Correlation Between Bank Rakyat and Etao International
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Etao International 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 Etao International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Etao International Co,, you can compare the effects of market volatilities on Bank Rakyat and Etao International 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 Etao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Etao International.
Diversification Opportunities for Bank Rakyat and Etao International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Etao is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Etao International Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etao International Co, 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 Etao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etao International Co, has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Etao International go up and down completely randomly.
Pair Corralation between Bank Rakyat and Etao International
If you would invest 5.00 in Etao International Co, on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Etao International Co, or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.0% |
| Values | Daily Returns |
Bank Rakyat vs. Etao International Co,
Performance |
| Timeline |
| Bank Rakyat |
| Etao International Co, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Etao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Etao International
The main advantage of trading using opposite Bank Rakyat and Etao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Etao International 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 Etao International will offset losses from the drop in Etao International's 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 |
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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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