Correlation Between Bank Rakyat and Geberit AG
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Geberit AG 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 Geberit AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Geberit AG ADR, you can compare the effects of market volatilities on Bank Rakyat and Geberit AG 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 Geberit AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Geberit AG.
Diversification Opportunities for Bank Rakyat and Geberit AG
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Geberit is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Geberit AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geberit AG ADR 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 Geberit AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geberit AG ADR has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Geberit AG go up and down completely randomly.
Pair Corralation between Bank Rakyat and Geberit AG
Assuming the 90 days horizon Bank Rakyat is expected to generate 1.52 times more return on investment than Geberit AG. However, Bank Rakyat is 1.52 times more volatile than Geberit AG ADR. It trades about -0.01 of its potential returns per unit of risk. Geberit AG ADR is currently generating about -0.01 per unit of risk. If you would invest 1,390 in Bank Rakyat on September 1, 2024 and sell it today you would lose (45.00) from holding Bank Rakyat or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank Rakyat vs. Geberit AG ADR
Performance |
| Timeline |
| Bank Rakyat |
| Geberit AG ADR |
Bank Rakyat and Geberit AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Geberit AG
The main advantage of trading using opposite Bank Rakyat and Geberit AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Geberit AG 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 Geberit AG will offset losses from the drop in Geberit AG's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Delhi Bank Corp | Bank Rakyat vs. Uwharrie Capital Corp |
| Geberit AG vs. DSV Panalpina AS | Geberit AG vs. SGS SA | Geberit AG vs. Givaudan SA ADR | Geberit AG vs. Kuehne Nagel International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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