Correlation Between Bank Rakyat and Xinyi Glass
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Xinyi Glass 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 Xinyi Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Xinyi Glass Holdings, you can compare the effects of market volatilities on Bank Rakyat and Xinyi Glass 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 Xinyi Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Xinyi Glass.
Diversification Opportunities for Bank Rakyat and Xinyi Glass
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Xinyi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Xinyi Glass Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyi Glass Holdings 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 Xinyi Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyi Glass Holdings has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Xinyi Glass go up and down completely randomly.
Pair Corralation between Bank Rakyat and Xinyi Glass
Assuming the 90 days horizon Bank Rakyat is expected to generate 0.56 times more return on investment than Xinyi Glass. However, Bank Rakyat is 1.78 times less risky than Xinyi Glass. It trades about 0.01 of its potential returns per unit of risk. Xinyi Glass Holdings is currently generating about -0.02 per unit of risk. If you would invest 1,377 in Bank Rakyat on August 30, 2024 and sell it today you would lose (10.00) from holding Bank Rakyat or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank Rakyat vs. Xinyi Glass Holdings
Performance |
| Timeline |
| Bank Rakyat |
| Xinyi Glass Holdings |
Bank Rakyat and Xinyi Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Xinyi Glass
The main advantage of trading using opposite Bank Rakyat and Xinyi Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Xinyi Glass 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 Xinyi Glass will offset losses from the drop in Xinyi Glass' long position.The idea behind Bank Rakyat and Xinyi Glass Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Xinyi Glass vs. Xinyi Glass Holdings | Xinyi Glass vs. CEMATRIX | Xinyi Glass vs. CEMEX SAB de | Xinyi Glass vs. China National Building |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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