Correlation Between Bank Rakyat and Rackla Metals
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Rackla Metals 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 Rackla Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Rackla Metals, you can compare the effects of market volatilities on Bank Rakyat and Rackla Metals 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 Rackla Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Rackla Metals.
Diversification Opportunities for Bank Rakyat and Rackla Metals
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Rackla is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals 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 Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Rackla Metals go up and down completely randomly.
Pair Corralation between Bank Rakyat and Rackla Metals
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Rackla Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 6.36 times less risky than Rackla Metals. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Rackla Metals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5.30 in Rackla Metals on August 29, 2024 and sell it today you would earn a total of 1.50 from holding Rackla Metals or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank Rakyat vs. Rackla Metals
Performance |
| Timeline |
| Bank Rakyat |
| Rackla Metals |
Bank Rakyat and Rackla Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Rackla Metals
The main advantage of trading using opposite Bank Rakyat and Rackla Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Rackla Metals 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 Rackla Metals will offset losses from the drop in Rackla Metals' long position.| Bank Rakyat vs. Israel Discount Bank | Bank Rakyat vs. Baraboo Bancorporation | Bank Rakyat vs. Danske Bank AS | Bank Rakyat vs. Jyske Bank AS |
| Rackla Metals vs. TRU Precious Metals | Rackla Metals vs. North Peak Resources | Rackla Metals vs. Augusta Gold Corp | Rackla Metals vs. Nine Mile Metals |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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