Correlation Between BANK RAKYAT and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Hawesko Holding 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 Hawesko Holding 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 Hawesko Holding AG, you can compare the effects of market volatilities on BANK RAKYAT and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Hawesko Holding.
Diversification Opportunities for BANK RAKYAT and Hawesko Holding
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and Hawesko is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Hawesko Holding go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Hawesko Holding
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 1.34 times more return on investment than Hawesko Holding. However, BANK RAKYAT is 1.34 times more volatile than Hawesko Holding AG. It trades about 0.0 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.04 per unit of risk. If you would invest 28.00 in BANK RAKYAT IND on September 12, 2024 and sell it today you would lose (4.00) from holding BANK RAKYAT IND or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Hawesko Holding AG
Performance |
| Timeline |
| BANK RAKYAT IND |
| Hawesko Holding AG |
BANK RAKYAT and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Hawesko Holding
The main advantage of trading using opposite BANK RAKYAT and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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