Correlation Between Bank Rakyat and SANUWAVE Health
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and SANUWAVE Health 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 SANUWAVE Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and SANUWAVE Health, you can compare the effects of market volatilities on Bank Rakyat and SANUWAVE Health 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 SANUWAVE Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and SANUWAVE Health.
Diversification Opportunities for Bank Rakyat and SANUWAVE Health
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and SANUWAVE is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and SANUWAVE Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANUWAVE Health 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 SANUWAVE Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANUWAVE Health has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and SANUWAVE Health go up and down completely randomly.
Pair Corralation between Bank Rakyat and SANUWAVE Health
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the SANUWAVE Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 3.35 times less risky than SANUWAVE Health. The pink sheet trades about -0.2 of its potential returns per unit of risk. The SANUWAVE Health is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,750 in SANUWAVE Health on August 31, 2024 and sell it today you would earn a total of 450.00 from holding SANUWAVE Health or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. SANUWAVE Health
Performance |
| Timeline |
| Bank Rakyat |
| SANUWAVE Health |
Bank Rakyat and SANUWAVE Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and SANUWAVE Health
The main advantage of trading using opposite Bank Rakyat and SANUWAVE Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, SANUWAVE Health 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 SANUWAVE Health will offset losses from the drop in SANUWAVE Health's long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Kasikornbank Public Co |
| SANUWAVE Health vs. Brainsway | SANUWAVE Health vs. Venus Concept | SANUWAVE Health vs. Tactile Systems Technology | SANUWAVE Health vs. Icecure Medical |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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