Correlation Between Bank Rakyat and Zhongsheng Group
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Zhongsheng Group 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 Zhongsheng Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Zhongsheng Group Holdings, you can compare the effects of market volatilities on Bank Rakyat and Zhongsheng Group 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 Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Zhongsheng Group.
Diversification Opportunities for Bank Rakyat and Zhongsheng Group
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Zhongsheng is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Zhongsheng Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongsheng Group 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 Zhongsheng Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongsheng Group Holdings has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Zhongsheng Group go up and down completely randomly.
Pair Corralation between Bank Rakyat and Zhongsheng Group
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Zhongsheng Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 2.97 times less risky than Zhongsheng Group. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Zhongsheng Group Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,437 in Zhongsheng Group Holdings on August 31, 2024 and sell it today you would lose (1,299) from holding Zhongsheng Group Holdings or give up 37.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bank Rakyat vs. Zhongsheng Group Holdings
Performance |
| Timeline |
| Bank Rakyat |
| Zhongsheng Group Holdings |
Bank Rakyat and Zhongsheng Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Zhongsheng Group
The main advantage of trading using opposite Bank Rakyat and Zhongsheng Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Zhongsheng Group 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 Zhongsheng Group will offset losses from the drop in Zhongsheng Group's long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Piraeus Bank SA | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Kasikornbank Public Co |
| Zhongsheng Group vs. Vroom Inc | Zhongsheng Group vs. CarMax Inc | Zhongsheng Group vs. SunCar Technology Group | Zhongsheng Group vs. U Power Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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