Correlation Between Bank Rakyat and SunPower
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and SunPower 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 SunPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and SunPower, you can compare the effects of market volatilities on Bank Rakyat and SunPower 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 SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and SunPower.
Diversification Opportunities for Bank Rakyat and SunPower
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and SunPower is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower 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 SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and SunPower go up and down completely randomly.
Pair Corralation between Bank Rakyat and SunPower
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.1 times more return on investment than SunPower. However, Bank Rakyat is 10.41 times less risky than SunPower. It trades about 0.0 of its potential returns per unit of risk. SunPower is currently generating about -0.3 per unit of risk. If you would invest 1,378 in Bank Rakyat on September 2, 2024 and sell it today you would lose (32.00) from holding Bank Rakyat or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 46.03% |
| Values | Daily Returns |
Bank Rakyat vs. SunPower
Performance |
| Timeline |
| Bank Rakyat |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and SunPower
The main advantage of trading using opposite Bank Rakyat and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Uwharrie Capital Corp |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower vs. SolarEdge Technologies |
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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