Correlation Between Bank Rakyat and Tingyi Holding
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Tingyi Holding 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 Tingyi Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Tingyi Holding Corp, you can compare the effects of market volatilities on Bank Rakyat and Tingyi Holding 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 Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Tingyi Holding.
Diversification Opportunities for Bank Rakyat and Tingyi Holding
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Tingyi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding 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 Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Tingyi Holding go up and down completely randomly.
Pair Corralation between Bank Rakyat and Tingyi Holding
If you would invest 1,238 in Bank Rakyat on October 20, 2024 and sell it today you would earn a total of 27.00 from holding Bank Rakyat or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Bank Rakyat vs. Tingyi Holding Corp
Performance |
| Timeline |
| Bank Rakyat |
| Tingyi Holding Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Tingyi Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Tingyi Holding
The main advantage of trading using opposite Bank Rakyat and Tingyi Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Tingyi Holding 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 Tingyi Holding will offset losses from the drop in Tingyi Holding's long position.| Bank Rakyat vs. The Farmers Bank | Bank Rakyat vs. CCSB Financial Corp | Bank Rakyat vs. Bank of Utica | Bank Rakyat vs. Delhi Bank Corp |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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