Correlation Between Bank Rakyat and Orca Energy
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Orca Energy 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 Orca Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Orca Energy Group, you can compare the effects of market volatilities on Bank Rakyat and Orca Energy 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 Orca Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Orca Energy.
Diversification Opportunities for Bank Rakyat and Orca Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Orca is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Orca Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orca Energy Group 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 Orca Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orca Energy Group has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Orca Energy go up and down completely randomly.
Pair Corralation between Bank Rakyat and Orca Energy
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.48 times more return on investment than Orca Energy. However, Bank Rakyat is 2.09 times less risky than Orca Energy. It trades about -0.02 of its potential returns per unit of risk. Orca Energy Group is currently generating about -0.04 per unit of risk. If you would invest 1,578 in Bank Rakyat on September 1, 2024 and sell it today you would lose (233.00) from holding Bank Rakyat or give up 14.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 69.14% |
| Values | Daily Returns |
Bank Rakyat vs. Orca Energy Group
Performance |
| Timeline |
| Bank Rakyat |
| Orca Energy Group |
Bank Rakyat and Orca Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Orca Energy
The main advantage of trading using opposite Bank Rakyat and Orca Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Orca Energy 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 Orca Energy will offset losses from the drop in Orca Energy'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 |
| Orca Energy vs. Petroleo Brasileiro Petrobras | Orca Energy vs. Equinor ASA ADR | Orca Energy vs. Eni SpA ADR | Orca Energy vs. YPF Sociedad Anonima |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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