Correlation Between Bank Rakyat and Luduson G
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Luduson G 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 Luduson G into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Luduson G, you can compare the effects of market volatilities on Bank Rakyat and Luduson G 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 Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Luduson G.
Diversification Opportunities for Bank Rakyat and Luduson G
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Luduson is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G 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 Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Luduson G go up and down completely randomly.
Pair Corralation between Bank Rakyat and Luduson G
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.08 times more return on investment than Luduson G. However, Bank Rakyat is 12.21 times less risky than Luduson G. It trades about -0.36 of its potential returns per unit of risk. Luduson G is currently generating about -0.14 per unit of risk. If you would invest 1,533 in Bank Rakyat on September 1, 2024 and sell it today you would lose (187.00) from holding Bank Rakyat or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Luduson G
Performance |
| Timeline |
| Bank Rakyat |
| Luduson G |
Bank Rakyat and Luduson G Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Luduson G
The main advantage of trading using opposite Bank Rakyat and Luduson G positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Luduson G 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 Luduson G will offset losses from the drop in Luduson G'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 |
| Luduson G vs. East Africa Metals | Luduson G vs. AMCON Distributing | Luduson G vs. FitLife Brands, Common | Luduson G vs. Paiute Oil Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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