Correlation Between Bank Rakyat and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Schibsted ASA 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 Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Schibsted ASA ADR, you can compare the effects of market volatilities on Bank Rakyat and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Schibsted ASA.
Diversification Opportunities for Bank Rakyat and Schibsted ASA
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Schibsted is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Schibsted ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA ADR 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA ADR has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Schibsted ASA go up and down completely randomly.
Pair Corralation between Bank Rakyat and Schibsted ASA
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Schibsted ASA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.64 times less risky than Schibsted ASA. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Schibsted ASA ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,048 in Schibsted ASA ADR on September 2, 2024 and sell it today you would earn a total of 106.00 from holding Schibsted ASA ADR or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Schibsted ASA ADR
Performance |
| Timeline |
| Bank Rakyat |
| Schibsted ASA ADR |
Bank Rakyat and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Schibsted ASA
The main advantage of trading using opposite Bank Rakyat and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Uwharrie Capital Corp |
| Schibsted ASA vs. Slate Office REIT | Schibsted ASA vs. HUMANA INC | Schibsted ASA vs. Aquagold International | Schibsted ASA vs. Barloworld Ltd ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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