Correlation Between Bank Rakyat and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and OceanaGold, you can compare the effects of market volatilities on Bank Rakyat and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and OceanaGold.
Diversification Opportunities for Bank Rakyat and OceanaGold
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and OceanaGold is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and OceanaGold go up and down completely randomly.
Pair Corralation between Bank Rakyat and OceanaGold
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the OceanaGold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.87 times less risky than OceanaGold. The pink sheet trades about 0.0 of its potential returns per unit of risk. The OceanaGold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 193.00 in OceanaGold on September 4, 2024 and sell it today you would earn a total of 124.00 from holding OceanaGold or generate 64.25% 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. OceanaGold
Performance |
| Timeline |
| Bank Rakyat |
| OceanaGold |
Bank Rakyat and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and OceanaGold
The main advantage of trading using opposite Bank Rakyat and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold'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 |
| OceanaGold vs. Advantage Solutions | OceanaGold vs. Atlas Corp | OceanaGold vs. PureCycle Technologies | OceanaGold vs. WM Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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