Correlation Between BANK RAKYAT and Euronext
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Euronext 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 Euronext 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 Euronext NV, you can compare the effects of market volatilities on BANK RAKYAT and Euronext 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 Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Euronext.
Diversification Opportunities for BANK RAKYAT and Euronext
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Euronext is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV 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 Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Euronext go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Euronext
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Euronext. In addition to that, BANK RAKYAT is 1.1 times more volatile than Euronext NV. It trades about -0.08 of its total potential returns per unit of risk. Euronext NV is currently generating about 0.16 per unit of volatility. If you would invest 10,020 in Euronext NV on September 12, 2024 and sell it today you would earn a total of 640.00 from holding Euronext NV or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Euronext NV
Performance |
| Timeline |
| BANK RAKYAT IND |
| Euronext NV |
BANK RAKYAT and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Euronext
The main advantage of trading using opposite BANK RAKYAT and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext's long position.| BANK RAKYAT vs. DICKER DATA LTD | BANK RAKYAT vs. DATANG INTL POW | BANK RAKYAT vs. Evolution Mining Limited | BANK RAKYAT vs. Scandinavian Tobacco Group |
| Euronext vs. CME Group | Euronext vs. Intercontinental Exchange | Euronext vs. Hong Kong Exchanges | Euronext vs. London Stock Exchange |
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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