Correlation Between Bank Rakyat and Global Partner
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Global Partner Acq, you can compare the effects of market volatilities on Bank Rakyat and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Global Partner.
Diversification Opportunities for Bank Rakyat and Global Partner
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Global is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Global Partner go up and down completely randomly.
Pair Corralation between Bank Rakyat and Global Partner
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.76 times more return on investment than Global Partner. However, Bank Rakyat is 1.31 times less risky than Global Partner. It trades about -0.01 of its potential returns per unit of risk. Global Partner Acq is currently generating about -0.21 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 | Significant |
| Accuracy | 19.84% |
| Values | Daily Returns |
Bank Rakyat vs. Global Partner Acq
Performance |
| Timeline |
| Bank Rakyat |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Global Partner
The main advantage of trading using opposite Bank Rakyat and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner'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 |
| Global Partner vs. NH Foods Ltd | Global Partner vs. Diageo PLC ADR | Global Partner vs. Lifevantage | Global Partner vs. Grocery Outlet Holding |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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