Correlation Between BANK RAKYAT and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on BANK RAKYAT and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Baker Hughes.
Diversification Opportunities for BANK RAKYAT and Baker Hughes
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Baker is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Baker Hughes go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Baker Hughes
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Baker Hughes. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.15 times less risky than Baker Hughes. The stock trades about -0.07 of its potential returns per unit of risk. The Baker Hughes Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 3,441 in Baker Hughes Co on August 29, 2024 and sell it today you would earn a total of 681.00 from holding Baker Hughes Co or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Baker Hughes Co
Performance |
| Timeline |
| BANK RAKYAT IND |
| Baker Hughes |
BANK RAKYAT and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Baker Hughes
The main advantage of trading using opposite BANK RAKYAT and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| BANK RAKYAT vs. Ultra Clean Holdings | BANK RAKYAT vs. United Airlines Holdings | BANK RAKYAT vs. SINGAPORE AIRLINES | BANK RAKYAT vs. PT Bank Maybank |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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