Correlation Between BANK RAKYAT and HEALTHSTREAM (HL5SG)
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM, you can compare the effects of market volatilities on BANK RAKYAT and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and HEALTHSTREAM (HL5SG).
Diversification Opportunities for BANK RAKYAT and HEALTHSTREAM (HL5SG)
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and HEALTHSTREAM is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and HEALTHSTREAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHSTREAM (HL5SG) has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and HEALTHSTREAM (HL5SG) go up and down completely randomly.
Pair Corralation between BANK RAKYAT and HEALTHSTREAM (HL5SG)
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 4.63 times less return on investment than HEALTHSTREAM (HL5SG). In addition to that, BANK RAKYAT is 1.85 times more volatile than HEALTHSTREAM. It trades about 0.01 of its total potential returns per unit of risk. HEALTHSTREAM is currently generating about 0.11 per unit of volatility. If you would invest 2,980 in HEALTHSTREAM on October 24, 2024 and sell it today you would earn a total of 80.00 from holding HEALTHSTREAM or generate 2.68% 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. HEALTHSTREAM
Performance |
Timeline |
BANK RAKYAT IND |
HEALTHSTREAM (HL5SG) |
BANK RAKYAT and HEALTHSTREAM (HL5SG) Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and HEALTHSTREAM (HL5SG)
The main advantage of trading using opposite BANK RAKYAT and HEALTHSTREAM (HL5SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM (HL5SG) will offset losses from the drop in HEALTHSTREAM (HL5SG)'s long position.BANK RAKYAT vs. APPLIED MATERIALS | BANK RAKYAT vs. Fevertree Drinks PLC | BANK RAKYAT vs. Applied Materials | BANK RAKYAT vs. Mitsubishi Materials |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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