Correlation Between BANK RAKYAT and Hong Kong
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Hong Kong 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 Hong Kong 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 Hong Kong Exchanges, you can compare the effects of market volatilities on BANK RAKYAT and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Hong Kong.
Diversification Opportunities for BANK RAKYAT and Hong Kong
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Hong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Hong Kong go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Hong Kong
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Hong Kong. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.38 times less risky than Hong Kong. The stock trades about -0.08 of its potential returns per unit of risk. The Hong Kong Exchanges is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,726 in Hong Kong Exchanges on September 13, 2024 and sell it today you would earn a total of 24.00 from holding Hong Kong Exchanges or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Hong Kong Exchanges
Performance |
| Timeline |
| BANK RAKYAT IND |
| Hong Kong Exchanges |
BANK RAKYAT and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Hong Kong
The main advantage of trading using opposite BANK RAKYAT and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| BANK RAKYAT vs. GigaMedia | BANK RAKYAT vs. TSOGO SUN GAMING | BANK RAKYAT vs. QINGCI GAMES INC | BANK RAKYAT vs. Scientific Games |
| Hong Kong vs. Internet Thailand PCL | Hong Kong vs. NorAm Drilling AS | Hong Kong vs. INTERSHOP Communications Aktiengesellschaft | Hong Kong vs. RYU Apparel |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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