Correlation Between Bank Rakyat and TVA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and TVA 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 TVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and TVA Group, you can compare the effects of market volatilities on Bank Rakyat and TVA 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 TVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and TVA.
Diversification Opportunities for Bank Rakyat and TVA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and TVA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and TVA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TVA Group 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 TVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TVA Group has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and TVA go up and down completely randomly.
Pair Corralation between Bank Rakyat and TVA
Assuming the 90 days horizon Bank Rakyat is expected to generate 2.32 times more return on investment than TVA. However, Bank Rakyat is 2.32 times more volatile than TVA Group. It trades about -0.02 of its potential returns per unit of risk. TVA Group is currently generating about -0.07 per unit of risk. If you would invest 1,578 in Bank Rakyat on September 1, 2024 and sell it today you would lose (233.00) from holding Bank Rakyat or give up 14.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Bank Rakyat vs. TVA Group
Performance |
| Timeline |
| Bank Rakyat |
| TVA Group |
Bank Rakyat and TVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and TVA
The main advantage of trading using opposite Bank Rakyat and TVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, TVA 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 TVA will offset losses from the drop in TVA's long position.| Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Turkiye Garanti Bankasi | Bank Rakyat vs. Delhi Bank Corp | Bank Rakyat vs. Uwharrie Capital Corp |
| TVA vs. HUMANA INC | TVA vs. Aquagold International | TVA vs. Barloworld Ltd ADR | TVA vs. Thrivent High Yield |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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