Correlation Between Bank Rakyat and West Vault
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and West Vault 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 West Vault into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and West Vault Mining, you can compare the effects of market volatilities on Bank Rakyat and West Vault 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 West Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and West Vault.
Diversification Opportunities for Bank Rakyat and West Vault
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and West is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and West Vault Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Vault Mining 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 West Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Vault Mining has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and West Vault go up and down completely randomly.
Pair Corralation between Bank Rakyat and West Vault
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.32 times more return on investment than West Vault. However, Bank Rakyat is 3.09 times less risky than West Vault. It trades about -0.21 of its potential returns per unit of risk. West Vault Mining is currently generating about -0.26 per unit of risk. If you would invest 1,504 in Bank Rakyat on August 29, 2024 and sell it today you would lose (127.00) from holding Bank Rakyat or give up 8.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat vs. West Vault Mining
Performance |
| Timeline |
| Bank Rakyat |
| West Vault Mining |
Bank Rakyat and West Vault Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and West Vault
The main advantage of trading using opposite Bank Rakyat and West Vault positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, West Vault 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 West Vault will offset losses from the drop in West Vault'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 |
| West Vault vs. Aurelius Minerals | West Vault vs. Quebec Precious Metals | West Vault vs. Omineca Mining and | West Vault vs. Altamira Gold Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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