Correlation Between Bank Rakyat and Lattice Semiconductor
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Lattice Semiconductor 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 Lattice Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Lattice Semiconductor, you can compare the effects of market volatilities on Bank Rakyat and Lattice Semiconductor 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 Lattice Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Lattice Semiconductor.
Diversification Opportunities for Bank Rakyat and Lattice Semiconductor
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Lattice is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor 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 Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Lattice Semiconductor go up and down completely randomly.
Pair Corralation between Bank Rakyat and Lattice Semiconductor
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.53 times more return on investment than Lattice Semiconductor. However, Bank Rakyat is 1.9 times less risky than Lattice Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.0 per unit of risk. If you would invest 1,377 in Bank Rakyat on August 30, 2024 and sell it today you would lose (10.00) from holding Bank Rakyat or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Lattice Semiconductor
Performance |
| Timeline |
| Bank Rakyat |
| Lattice Semiconductor |
Bank Rakyat and Lattice Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Lattice Semiconductor
The main advantage of trading using opposite Bank Rakyat and Lattice Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Lattice Semiconductor 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 Lattice Semiconductor will offset losses from the drop in Lattice Semiconductor's long position.The idea behind Bank Rakyat and Lattice Semiconductor 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.| Lattice Semiconductor vs. First Solar | Lattice Semiconductor vs. Sunrun Inc | Lattice Semiconductor vs. Canadian Solar | Lattice Semiconductor vs. SolarEdge Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |