Correlation Between BANK RAKYAT and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Imperial Metals 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 Imperial Metals 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 Imperial Metals, you can compare the effects of market volatilities on BANK RAKYAT and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Imperial Metals.
Diversification Opportunities for BANK RAKYAT and Imperial Metals
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Imperial is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Imperial Metals go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Imperial Metals
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 1.8 times less return on investment than Imperial Metals. But when comparing it to its historical volatility, BANK RAKYAT IND is 1.17 times less risky than Imperial Metals. It trades about 0.02 of its potential returns per unit of risk. Imperial Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 152.00 in Imperial Metals on January 13, 2025 and sell it today you would earn a total of 1.00 from holding Imperial Metals or generate 0.66% 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. Imperial Metals
Performance |
| Timeline |
| BANK RAKYAT IND |
| Imperial Metals |
BANK RAKYAT and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Imperial Metals
The main advantage of trading using opposite BANK RAKYAT and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| BANK RAKYAT vs. De Grey Mining | BANK RAKYAT vs. GREENX METALS LTD | BANK RAKYAT vs. TELECOM ITALIA | BANK RAKYAT vs. Singapore Telecommunications Limited |
| Imperial Metals vs. Universal Entertainment | Imperial Metals vs. AFRICAN MEDIA ENT | Imperial Metals vs. LINMON MEDIA LTD | Imperial Metals vs. Agricultural Bank of |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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