Correlation Between BANK RAKYAT and JD HEALTH
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and JD HEALTH 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 JD HEALTH 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 JD HEALTH INTL, you can compare the effects of market volatilities on BANK RAKYAT and JD HEALTH 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 JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and JD HEALTH.
Diversification Opportunities for BANK RAKYAT and JD HEALTH
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and 8ZN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and JD HEALTH go up and down completely randomly.
Pair Corralation between BANK RAKYAT and JD HEALTH
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 0.55 times more return on investment than JD HEALTH. However, BANK RAKYAT IND is 1.82 times less risky than JD HEALTH. It trades about -0.12 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about -0.11 per unit of risk. If you would invest 27.00 in BANK RAKYAT IND on August 30, 2024 and sell it today you would lose (3.00) from holding BANK RAKYAT IND or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. JD HEALTH INTL
Performance |
| Timeline |
| BANK RAKYAT IND |
| JD HEALTH INTL |
BANK RAKYAT and JD HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and JD HEALTH
The main advantage of trading using opposite BANK RAKYAT and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.| BANK RAKYAT vs. PT Indofood Sukses | BANK RAKYAT vs. Sunny Optical Technology | BANK RAKYAT vs. Microchip Technology Incorporated | BANK RAKYAT vs. Lifeway Foods |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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