Correlation Between Bank Rakyat and Kunlun Energy
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Kunlun Energy 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 Kunlun Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Kunlun Energy, you can compare the effects of market volatilities on Bank Rakyat and Kunlun Energy 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 Kunlun Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Kunlun Energy.
Diversification Opportunities for Bank Rakyat and Kunlun Energy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Kunlun is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Kunlun Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kunlun Energy 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 Kunlun Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kunlun Energy has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Kunlun Energy go up and down completely randomly.
Pair Corralation between Bank Rakyat and Kunlun Energy
If you would invest 96.00 in Kunlun Energy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Kunlun Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Kunlun Energy
Performance |
| Timeline |
| Bank Rakyat |
| Kunlun Energy |
Bank Rakyat and Kunlun Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Kunlun Energy
The main advantage of trading using opposite Bank Rakyat and Kunlun Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Kunlun Energy 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 Kunlun Energy will offset losses from the drop in Kunlun Energy's long position.The idea behind Bank Rakyat and Kunlun Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kunlun Energy vs. Cosan SA ADR | Kunlun Energy vs. Star Gas Partners | Kunlun Energy vs. Valvoline | Kunlun Energy vs. Zoom Video Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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