Correlation Between Bank Rakyat and Eastgate Biotech
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Eastgate Biotech 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 Eastgate Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Eastgate Biotech Corp, you can compare the effects of market volatilities on Bank Rakyat and Eastgate Biotech 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 Eastgate Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Eastgate Biotech.
Diversification Opportunities for Bank Rakyat and Eastgate Biotech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Eastgate is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Eastgate Biotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastgate Biotech Corp 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 Eastgate Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastgate Biotech Corp has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Eastgate Biotech go up and down completely randomly.
Pair Corralation between Bank Rakyat and Eastgate Biotech
If you would invest 0.45 in Eastgate Biotech Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Eastgate Biotech Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank Rakyat vs. Eastgate Biotech Corp
Performance |
| Timeline |
| Bank Rakyat |
| Eastgate Biotech Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Eastgate Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Eastgate Biotech
The main advantage of trading using opposite Bank Rakyat and Eastgate Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Eastgate Biotech 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 Eastgate Biotech will offset losses from the drop in Eastgate Biotech'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 |
| Eastgate Biotech vs. Amkor Technology | Eastgate Biotech vs. Black Hills | Eastgate Biotech vs. IPG Photonics | Eastgate Biotech vs. NetEase |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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