Correlation Between BANK RAKYAT and HNI
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and HNI 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 HNI 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 HNI Corporation, you can compare the effects of market volatilities on BANK RAKYAT and HNI 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 HNI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and HNI.
Diversification Opportunities for BANK RAKYAT and HNI
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and HNI is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and HNI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corporation 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 HNI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corporation has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and HNI go up and down completely randomly.
Pair Corralation between BANK RAKYAT and HNI
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 29.72 times less return on investment than HNI. In addition to that, BANK RAKYAT is 1.41 times more volatile than HNI Corporation. It trades about 0.0 of its total potential returns per unit of risk. HNI Corporation is currently generating about 0.08 per unit of volatility. If you would invest 2,545 in HNI Corporation on August 27, 2024 and sell it today you would earn a total of 2,605 from holding HNI Corporation or generate 102.36% 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. HNI Corp.
Performance |
| Timeline |
| BANK RAKYAT IND |
| HNI Corporation |
BANK RAKYAT and HNI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and HNI
The main advantage of trading using opposite BANK RAKYAT and HNI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, HNI 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 HNI will offset losses from the drop in HNI's long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Microsoft |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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