Correlation Between Bank Rakyat and Soma Gold
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Soma Gold 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 Soma Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Soma Gold Corp, you can compare the effects of market volatilities on Bank Rakyat and Soma Gold 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 Soma Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Soma Gold.
Diversification Opportunities for Bank Rakyat and Soma Gold
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Soma is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Soma Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soma Gold Corp 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 Soma Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soma Gold Corp has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Soma Gold go up and down completely randomly.
Pair Corralation between Bank Rakyat and Soma Gold
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Soma Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 2.41 times less risky than Soma Gold. The pink sheet trades about -0.37 of its potential returns per unit of risk. The Soma Gold Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Soma Gold Corp on September 4, 2024 and sell it today you would lose (2.00) from holding Soma Gold Corp or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank Rakyat vs. Soma Gold Corp
Performance |
| Timeline |
| Bank Rakyat |
| Soma Gold Corp |
Bank Rakyat and Soma Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Soma Gold
The main advantage of trading using opposite Bank Rakyat and Soma Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Soma Gold 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 Soma Gold will offset losses from the drop in Soma Gold'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 |
| Soma Gold vs. Maritime Resources Corp | Soma Gold vs. Spanish Mountain Gold | Soma Gold vs. Grande Portage Resources |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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