Correlation Between BANK RAKYAT and Spacetalk
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Spacetalk 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 Spacetalk 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 Spacetalk, you can compare the effects of market volatilities on BANK RAKYAT and Spacetalk 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 Spacetalk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Spacetalk.
Diversification Opportunities for BANK RAKYAT and Spacetalk
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Spacetalk is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Spacetalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spacetalk 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 Spacetalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spacetalk has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Spacetalk go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Spacetalk
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 25.24 times less return on investment than Spacetalk. But when comparing it to its historical volatility, BANK RAKYAT IND is 3.72 times less risky than Spacetalk. It trades about 0.01 of its potential returns per unit of risk. Spacetalk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Spacetalk on November 1, 2024 and sell it today you would earn a total of 0.45 from holding Spacetalk or generate 5.0% 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. Spacetalk
Performance |
| Timeline |
| BANK RAKYAT IND |
| Spacetalk |
BANK RAKYAT and Spacetalk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Spacetalk
The main advantage of trading using opposite BANK RAKYAT and Spacetalk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Spacetalk 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 Spacetalk will offset losses from the drop in Spacetalk's long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc |
| Spacetalk vs. T Mobile | Spacetalk vs. China Mobile Limited | Spacetalk vs. Verizon Communications | Spacetalk vs. ATT Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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