Correlation Between Bank Rakyat and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Vinci SA 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 Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Vinci SA ADR, you can compare the effects of market volatilities on Bank Rakyat and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Vinci SA.
Diversification Opportunities for Bank Rakyat and Vinci SA
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Vinci is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Vinci SA go up and down completely randomly.
Pair Corralation between Bank Rakyat and Vinci SA
Assuming the 90 days horizon Bank Rakyat is expected to generate 1.2 times more return on investment than Vinci SA. However, Bank Rakyat is 1.2 times more volatile than Vinci SA ADR. It trades about 0.02 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.09 per unit of risk. If you would invest 1,338 in Bank Rakyat on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Bank Rakyat or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. Vinci SA ADR
Performance |
| Timeline |
| Bank Rakyat |
| Vinci SA ADR |
Bank Rakyat and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Vinci SA
The main advantage of trading using opposite Bank Rakyat and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| Bank Rakyat vs. Israel Discount Bank | Bank Rakyat vs. Baraboo Bancorporation | Bank Rakyat vs. Danske Bank AS | Bank Rakyat vs. Jyske Bank AS |
| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |