Correlation Between Bank Rakyat and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and First Hawaiian 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 First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and First Hawaiian, you can compare the effects of market volatilities on Bank Rakyat and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and First Hawaiian.
Diversification Opportunities for Bank Rakyat and First Hawaiian
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and First is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and First Hawaiian go up and down completely randomly.
Pair Corralation between Bank Rakyat and First Hawaiian
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the First Hawaiian. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.88 times less risky than First Hawaiian. The pink sheet trades about -0.36 of its potential returns per unit of risk. The First Hawaiian is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,479 in First Hawaiian on September 5, 2024 and sell it today you would earn a total of 227.00 from holding First Hawaiian or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. First Hawaiian
Performance |
| Timeline |
| Bank Rakyat |
| First Hawaiian |
Bank Rakyat and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and First Hawaiian
The main advantage of trading using opposite Bank Rakyat and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.| Bank Rakyat vs. First Hawaiian | Bank Rakyat vs. Central Pacific Financial | Bank Rakyat vs. Territorial Bancorp | Bank Rakyat vs. Comerica |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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