Correlation Between Bank Rakyat and Smartmetric
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Smartmetric 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 Smartmetric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Smartmetric, you can compare the effects of market volatilities on Bank Rakyat and Smartmetric 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 Smartmetric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Smartmetric.
Diversification Opportunities for Bank Rakyat and Smartmetric
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Smartmetric is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Smartmetric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartmetric 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 Smartmetric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartmetric has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Smartmetric go up and down completely randomly.
Pair Corralation between Bank Rakyat and Smartmetric
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Smartmetric. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 108.64 times less risky than Smartmetric. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Smartmetric is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Smartmetric on September 2, 2024 and sell it today you would lose (0.01) from holding Smartmetric or give up 50.0% 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. Smartmetric
Performance |
| Timeline |
| Bank Rakyat |
| Smartmetric |
Bank Rakyat and Smartmetric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Smartmetric
The main advantage of trading using opposite Bank Rakyat and Smartmetric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Smartmetric 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 Smartmetric will offset losses from the drop in Smartmetric's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Uwharrie Capital Corp |
| Smartmetric vs. Telos Corp | Smartmetric vs. Fuse Science | Smartmetric vs. Data443 Risk Mitigation | Smartmetric vs. Taoping |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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