Correlation Between Bank Rakyat and PetIQ
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and PetIQ 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 PetIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and PetIQ Inc, you can compare the effects of market volatilities on Bank Rakyat and PetIQ 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 PetIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and PetIQ.
Diversification Opportunities for Bank Rakyat and PetIQ
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and PetIQ is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and PetIQ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetIQ Inc 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 PetIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetIQ Inc has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and PetIQ go up and down completely randomly.
Pair Corralation between Bank Rakyat and PetIQ
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the PetIQ. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.98 times less risky than PetIQ. The pink sheet trades about -0.03 of its potential returns per unit of risk. The PetIQ Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,407 in PetIQ Inc on September 4, 2024 and sell it today you would earn a total of 1,691 from holding PetIQ Inc or generate 120.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.03% |
| Values | Daily Returns |
Bank Rakyat vs. PetIQ Inc
Performance |
| Timeline |
| Bank Rakyat |
| PetIQ Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Bank Rakyat and PetIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and PetIQ
The main advantage of trading using opposite Bank Rakyat and PetIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, PetIQ 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 PetIQ will offset losses from the drop in PetIQ'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 |
| PetIQ vs. Prestige Brand Holdings | PetIQ vs. Collegium Pharmaceutical | PetIQ vs. Silver Spike Investment | PetIQ vs. Regencell Bioscience Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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