Correlation Between Bank Rakyat and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Saturn Oil 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 Saturn Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Saturn Oil Gas, you can compare the effects of market volatilities on Bank Rakyat and Saturn Oil 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 Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Saturn Oil.
Diversification Opportunities for Bank Rakyat and Saturn Oil
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Saturn is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas 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 Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Saturn Oil go up and down completely randomly.
Pair Corralation between Bank Rakyat and Saturn Oil
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.62 times more return on investment than Saturn Oil. However, Bank Rakyat is 1.62 times less risky than Saturn Oil. It trades about 0.01 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 1,400 in Bank Rakyat on August 24, 2024 and sell it today you would lose (37.00) from holding Bank Rakyat or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank Rakyat vs. Saturn Oil Gas
Performance |
| Timeline |
| Bank Rakyat |
| Saturn Oil Gas |
Bank Rakyat and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Saturn Oil
The main advantage of trading using opposite Bank Rakyat and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Saturn Oil 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 Saturn Oil will offset losses from the drop in Saturn Oil's long position.| Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group | Bank Rakyat vs. Bank Central Asia | Bank Rakyat vs. PSB Holdings |
| Saturn Oil vs. San Leon Energy | Saturn Oil vs. Enwell Energy plc | Saturn Oil vs. Dno ASA | Saturn Oil vs. Questerre Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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