Correlation Between Bank Rakyat and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Jardine Matheson 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 Jardine Matheson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Jardine Matheson Holdings, you can compare the effects of market volatilities on Bank Rakyat and Jardine Matheson 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 Jardine Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Jardine Matheson.
Diversification Opportunities for Bank Rakyat and Jardine Matheson
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Jardine is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings 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 Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Jardine Matheson go up and down completely randomly.
Pair Corralation between Bank Rakyat and Jardine Matheson
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Jardine Matheson. In addition to that, Bank Rakyat is 1.31 times more volatile than Jardine Matheson Holdings. It trades about -0.36 of its total potential returns per unit of risk. Jardine Matheson Holdings is currently generating about 0.47 per unit of volatility. If you would invest 3,832 in Jardine Matheson Holdings on September 1, 2024 and sell it today you would earn a total of 505.00 from holding Jardine Matheson Holdings or generate 13.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Jardine Matheson Holdings
Performance |
| Timeline |
| Bank Rakyat |
| Jardine Matheson Holdings |
Bank Rakyat and Jardine Matheson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Jardine Matheson
The main advantage of trading using opposite Bank Rakyat and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Jardine Matheson 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 Jardine Matheson will offset losses from the drop in Jardine Matheson'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 |
| Jardine Matheson vs. Seychelle Environmtl | Jardine Matheson vs. Energy and Water | Jardine Matheson vs. One World Universe | Jardine Matheson vs. Vow ASA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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