Correlation Between Bank Rakyat and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Lixte Biotechnology 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 Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Bank Rakyat and Lixte Biotechnology 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 Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Lixte Biotechnology.
Diversification Opportunities for Bank Rakyat and Lixte Biotechnology
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Lixte is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between Bank Rakyat and Lixte Biotechnology
Assuming the 90 days horizon Bank Rakyat is expected to generate 6.87 times less return on investment than Lixte Biotechnology. But when comparing it to its historical volatility, Bank Rakyat is 1.51 times less risky than Lixte Biotechnology. It trades about 0.03 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Lixte Biotechnology Holdings on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Lixte Biotechnology Holdings or generate 11.71% 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. Lixte Biotechnology Holdings
Performance |
| Timeline |
| Bank Rakyat |
| Lixte Biotechnology |
Bank Rakyat and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Lixte Biotechnology
The main advantage of trading using opposite Bank Rakyat and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd | Lixte Biotechnology vs. Indaptus Therapeutics |
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 CEOs Directory module to screen CEOs from public companies around the world.
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