Correlation Between Bank Rakyat and ROC Energy
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and ROC 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 ROC 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 ROC Energy Acquisition, you can compare the effects of market volatilities on Bank Rakyat and ROC 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 ROC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and ROC Energy.
Diversification Opportunities for Bank Rakyat and ROC Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and ROC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and ROC Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROC Energy Acquisition 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 ROC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROC Energy Acquisition has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and ROC Energy go up and down completely randomly.
Pair Corralation between Bank Rakyat and ROC Energy
If you would invest 603.00 in ROC Energy Acquisition on August 30, 2024 and sell it today you would earn a total of 0.00 from holding ROC Energy Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Bank Rakyat vs. ROC Energy Acquisition
Performance |
| Timeline |
| Bank Rakyat |
| ROC Energy Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and ROC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and ROC Energy
The main advantage of trading using opposite Bank Rakyat and ROC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, ROC 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 ROC Energy will offset losses from the drop in ROC Energy's long position.| Bank Rakyat vs. Israel Discount Bank | Bank Rakyat vs. Danske Bank AS | Bank Rakyat vs. Absa Group Limited |
| ROC Energy vs. Origin Materials | ROC Energy vs. Sealed Air | ROC Energy vs. Axalta Coating Systems | ROC Energy vs. Nextplat Corp |
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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