Correlation Between BANK RAKYAT and GrafTech International
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and GrafTech International 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 GrafTech International 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 GrafTech International, you can compare the effects of market volatilities on BANK RAKYAT and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and GrafTech International.
Diversification Opportunities for BANK RAKYAT and GrafTech International
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and GrafTech is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and GrafTech International go up and down completely randomly.
Pair Corralation between BANK RAKYAT and GrafTech International
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 0.44 times more return on investment than GrafTech International. However, BANK RAKYAT IND is 2.25 times less risky than GrafTech International. It trades about -0.24 of its potential returns per unit of risk. GrafTech International is currently generating about -0.21 per unit of risk. If you would invest 25.00 in BANK RAKYAT IND on September 24, 2024 and sell it today you would lose (3.00) from holding BANK RAKYAT IND or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. GrafTech International
Performance |
| Timeline |
| BANK RAKYAT IND |
| GrafTech International |
BANK RAKYAT and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and GrafTech International
The main advantage of trading using opposite BANK RAKYAT and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Microsoft |
| GrafTech International vs. Evolution Mining Limited | GrafTech International vs. American Airlines Group | GrafTech International vs. Clean Energy Fuels | GrafTech International vs. ALERION CLEANPOWER |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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