Correlation Between Bank Rakyat and Pulse Seismic
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Pulse Seismic 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 Pulse Seismic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Pulse Seismic, you can compare the effects of market volatilities on Bank Rakyat and Pulse Seismic 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 Pulse Seismic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Pulse Seismic.
Diversification Opportunities for Bank Rakyat and Pulse Seismic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Pulse is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Pulse Seismic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulse Seismic 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 Pulse Seismic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulse Seismic has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Pulse Seismic go up and down completely randomly.
Pair Corralation between Bank Rakyat and Pulse Seismic
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Pulse Seismic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.15 times less risky than Pulse Seismic. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Pulse Seismic is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 185.00 in Pulse Seismic on August 26, 2024 and sell it today you would lose (17.00) from holding Pulse Seismic or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Pulse Seismic
Performance |
| Timeline |
| Bank Rakyat |
| Pulse Seismic |
Bank Rakyat and Pulse Seismic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Pulse Seismic
The main advantage of trading using opposite Bank Rakyat and Pulse Seismic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Pulse Seismic 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 Pulse Seismic will offset losses from the drop in Pulse Seismic's long position.| Bank Rakyat vs. PSB Holdings | Bank Rakyat vs. United Overseas Bank | Bank Rakyat vs. Turkiye Garanti Bankasi |
| Pulse Seismic vs. Now Inc | Pulse Seismic vs. Newpark Resources | Pulse Seismic vs. Enerflex | Pulse Seismic vs. Bristow Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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