Correlation Between BANK RAKYAT and Territorial Bancorp
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp, you can compare the effects of market volatilities on BANK RAKYAT and Territorial Bancorp 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 Territorial Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Territorial Bancorp.
Diversification Opportunities for BANK RAKYAT and Territorial Bancorp
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Territorial is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Territorial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Territorial Bancorp 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 Territorial Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Territorial Bancorp has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Territorial Bancorp go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Territorial Bancorp
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 0.85 times more return on investment than Territorial Bancorp. However, BANK RAKYAT IND is 1.18 times less risky than Territorial Bancorp. It trades about 0.0 of its potential returns per unit of risk. Territorial Bancorp is currently generating about -0.03 per unit of risk. If you would invest 28.00 in BANK RAKYAT IND on September 10, 2024 and sell it today you would lose (4.00) from holding BANK RAKYAT IND or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Territorial Bancorp
Performance |
| Timeline |
| BANK RAKYAT IND |
| Territorial Bancorp |
BANK RAKYAT and Territorial Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Territorial Bancorp
The main advantage of trading using opposite BANK RAKYAT and Territorial Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Territorial Bancorp 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 Territorial Bancorp will offset losses from the drop in Territorial Bancorp's long position.| BANK RAKYAT vs. GREENX METALS LTD | BANK RAKYAT vs. SEALED AIR | BANK RAKYAT vs. Norwegian Air Shuttle | BANK RAKYAT vs. Air New Zealand |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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