Correlation Between Bank Rakyat and Greenway Technologies
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Greenway Technologies 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 Greenway Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Greenway Technologies, you can compare the effects of market volatilities on Bank Rakyat and Greenway Technologies 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 Greenway Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Greenway Technologies.
Diversification Opportunities for Bank Rakyat and Greenway Technologies
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Greenway is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Greenway Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenway Technologies 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 Greenway Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenway Technologies has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Greenway Technologies go up and down completely randomly.
Pair Corralation between Bank Rakyat and Greenway Technologies
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Greenway Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 5.51 times less risky than Greenway Technologies. The pink sheet trades about -0.27 of its potential returns per unit of risk. The Greenway Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Greenway Technologies on November 29, 2024 and sell it today you would earn a total of 0.50 from holding Greenway Technologies or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Rakyat vs. Greenway Technologies
Performance |
| Timeline |
| Bank Rakyat |
| Greenway Technologies |
Bank Rakyat and Greenway Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Greenway Technologies
The main advantage of trading using opposite Bank Rakyat and Greenway Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Greenway Technologies 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 Greenway Technologies will offset losses from the drop in Greenway Technologies' long position.| Bank Rakyat vs. HDFC Bank Limited | Bank Rakyat vs. China Merchants Bank | Bank Rakyat vs. China Merchants Bank | Bank Rakyat vs. Fifth Third Bancorp |
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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 Stocks Directory module to find actively traded stocks across global markets.
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