Correlation Between BANK RAKYAT and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Agnico Eagle 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 Agnico Eagle 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 Agnico Eagle Mines, you can compare the effects of market volatilities on BANK RAKYAT and Agnico Eagle 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 Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Agnico Eagle.
Diversification Opportunities for BANK RAKYAT and Agnico Eagle
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Agnico is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Agnico Eagle go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Agnico Eagle
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Agnico Eagle. In addition to that, BANK RAKYAT is 1.05 times more volatile than Agnico Eagle Mines. It trades about -0.2 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.08 per unit of volatility. If you would invest 7,580 in Agnico Eagle Mines on August 26, 2024 and sell it today you would earn a total of 494.00 from holding Agnico Eagle Mines or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Agnico Eagle Mines
Performance |
| Timeline |
| BANK RAKYAT IND |
| Agnico Eagle Mines |
BANK RAKYAT and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Agnico Eagle
The main advantage of trading using opposite BANK RAKYAT and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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