Correlation Between Bank Rakyat and Kambi Group
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Kambi Group 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 Kambi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Kambi Group plc, you can compare the effects of market volatilities on Bank Rakyat and Kambi Group 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 Kambi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Kambi Group.
Diversification Opportunities for Bank Rakyat and Kambi Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Kambi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Kambi Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group plc 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 Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group plc has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Kambi Group go up and down completely randomly.
Pair Corralation between Bank Rakyat and Kambi Group
Assuming the 90 days horizon Bank Rakyat is expected to generate 6.41 times more return on investment than Kambi Group. However, Bank Rakyat is 6.41 times more volatile than Kambi Group plc. It trades about 0.04 of its potential returns per unit of risk. Kambi Group plc is currently generating about 0.22 per unit of risk. If you would invest 1,250 in Bank Rakyat on October 21, 2024 and sell it today you would earn a total of 15.00 from holding Bank Rakyat or generate 1.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
Bank Rakyat vs. Kambi Group plc
Performance |
Timeline |
Bank Rakyat |
Kambi Group plc |
Bank Rakyat and Kambi Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Rakyat and Kambi Group
The main advantage of trading using opposite Bank Rakyat and Kambi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Kambi Group 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 Kambi Group will offset losses from the drop in Kambi Group's long position.Bank Rakyat vs. The Farmers Bank | Bank Rakyat vs. CCSB Financial Corp | Bank Rakyat vs. Bank of Utica | Bank Rakyat vs. Delhi Bank Corp |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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