Correlation Between BANK RAKYAT and Grenke AG
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Grenke AG 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 Grenke AG 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 Grenke AG, you can compare the effects of market volatilities on BANK RAKYAT and Grenke AG 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 Grenke AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Grenke AG.
Diversification Opportunities for BANK RAKYAT and Grenke AG
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and Grenke is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Grenke AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenke AG 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 Grenke AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenke AG has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Grenke AG go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Grenke AG
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 1.02 times more return on investment than Grenke AG. However, BANK RAKYAT is 1.02 times more volatile than Grenke AG. It trades about -0.08 of its potential returns per unit of risk. Grenke AG is currently generating about -0.2 per unit of risk. If you would invest 25.00 in BANK RAKYAT IND on September 13, 2024 and sell it today you would lose (1.00) from holding BANK RAKYAT IND or give up 4.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
BANK RAKYAT IND vs. Grenke AG
Performance |
Timeline |
BANK RAKYAT IND |
Grenke AG |
BANK RAKYAT and Grenke AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and Grenke AG
The main advantage of trading using opposite BANK RAKYAT and Grenke AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Grenke AG 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 Grenke AG will offset losses from the drop in Grenke AG's long position.BANK RAKYAT vs. GigaMedia | BANK RAKYAT vs. TSOGO SUN GAMING | BANK RAKYAT vs. QINGCI GAMES INC | BANK RAKYAT vs. Scientific Games |
Grenke AG vs. Bumrungrad Hospital Public | Grenke AG vs. ATRYS HEALTH SA | Grenke AG vs. Spirent Communications plc | Grenke AG vs. EHEALTH |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
CEOs Directory Screen CEOs from public companies around the world | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |