Correlation Between Bank Rakyat and Federal Home
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Federal Home 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 Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Federal Home Loan, you can compare the effects of market volatilities on Bank Rakyat and Federal Home 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 Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Federal Home.
Diversification Opportunities for Bank Rakyat and Federal Home
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Federal is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Federal Home go up and down completely randomly.
Pair Corralation between Bank Rakyat and Federal Home
Assuming the 90 days horizon Bank Rakyat is expected to generate 63.98 times less return on investment than Federal Home. But when comparing it to its historical volatility, Bank Rakyat is 3.9 times less risky than Federal Home. It trades about 0.01 of its potential returns per unit of risk. Federal Home Loan is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 677.00 in Federal Home Loan on September 3, 2024 and sell it today you would earn a total of 843.00 from holding Federal Home Loan or generate 124.52% 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. Federal Home Loan
Performance |
| Timeline |
| Bank Rakyat |
| Federal Home Loan |
Bank Rakyat and Federal Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Federal Home
The main advantage of trading using opposite Bank Rakyat and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Federal Home 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 Federal Home will offset losses from the drop in Federal Home'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 |
| Federal Home vs. Federal National Mortgage | Federal Home vs. Federal National Mortgage | Federal Home vs. Federal National Mortgage | Federal Home vs. Federal National Mortgage |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |