Correlation Between Bank Rakyat and Indie Semiconductor
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Indie Semiconductor 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 Indie Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and indie Semiconductor, you can compare the effects of market volatilities on Bank Rakyat and Indie Semiconductor 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 Indie Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Indie Semiconductor.
Diversification Opportunities for Bank Rakyat and Indie Semiconductor
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Indie is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and indie Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on indie Semiconductor 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 Indie Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of indie Semiconductor has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Indie Semiconductor go up and down completely randomly.
Pair Corralation between Bank Rakyat and Indie Semiconductor
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Indie Semiconductor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 3.21 times less risky than Indie Semiconductor. The pink sheet trades about -0.04 of its potential returns per unit of risk. The indie Semiconductor is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 718.00 in indie Semiconductor on August 24, 2024 and sell it today you would lose (253.00) from holding indie Semiconductor or give up 35.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. indie Semiconductor
Performance |
| Timeline |
| Bank Rakyat |
| indie Semiconductor |
Bank Rakyat and Indie Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Indie Semiconductor
The main advantage of trading using opposite Bank Rakyat and Indie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Indie Semiconductor 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 Indie Semiconductor will offset losses from the drop in Indie Semiconductor's long position.| Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group | Bank Rakyat vs. Bank Central Asia | Bank Rakyat vs. PSB Holdings |
| Indie Semiconductor vs. Axcelis Technologies | Indie Semiconductor vs. inTest | Indie Semiconductor vs. Lam Research Corp | Indie Semiconductor vs. Photronics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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