Correlation Between BANK RAKYAT and ROBERTET
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and ROBERTET 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 ROBERTET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK RAKYAT IND and ROBERTET SA INH, you can compare the effects of market volatilities on BANK RAKYAT and ROBERTET 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 ROBERTET. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and ROBERTET.
Diversification Opportunities for BANK RAKYAT and ROBERTET
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and ROBERTET is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and ROBERTET SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROBERTET SA INH 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 IND are associated (or correlated) with ROBERTET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROBERTET SA INH has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and ROBERTET go up and down completely randomly.
Pair Corralation between BANK RAKYAT and ROBERTET
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the ROBERTET. In addition to that, BANK RAKYAT is 2.31 times more volatile than ROBERTET SA INH. It trades about -0.14 of its total potential returns per unit of risk. ROBERTET SA INH is currently generating about -0.09 per unit of volatility. If you would invest 87,900 in ROBERTET SA INH on September 21, 2024 and sell it today you would lose (2,200) from holding ROBERTET SA INH or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BANK RAKYAT IND vs. ROBERTET SA INH
Performance |
| Timeline |
| BANK RAKYAT IND |
| ROBERTET SA INH |
BANK RAKYAT and ROBERTET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and ROBERTET
The main advantage of trading using opposite BANK RAKYAT and ROBERTET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, ROBERTET 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 ROBERTET will offset losses from the drop in ROBERTET's long position.The idea behind BANK RAKYAT IND and ROBERTET SA INH 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.| ROBERTET vs. Datalogic SpA | ROBERTET vs. INFORMATION SVC GRP | ROBERTET vs. PLAYSTUDIOS A DL 0001 | ROBERTET vs. COLUMBIA SPORTSWEAR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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