Correlation Between BANK RAKYAT and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Maple Leaf 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 Maple Leaf 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 Maple Leaf Foods, you can compare the effects of market volatilities on BANK RAKYAT and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Maple Leaf.
Diversification Opportunities for BANK RAKYAT and Maple Leaf
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Maple is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Maple Leaf go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Maple Leaf
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 1.47 times less return on investment than Maple Leaf. In addition to that, BANK RAKYAT is 1.57 times more volatile than Maple Leaf Foods. It trades about 0.01 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.03 per unit of volatility. If you would invest 1,495 in Maple Leaf Foods on September 3, 2024 and sell it today you would earn a total of 65.00 from holding Maple Leaf Foods or generate 4.35% 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. Maple Leaf Foods
Performance |
| Timeline |
| BANK RAKYAT IND |
| Maple Leaf Foods |
BANK RAKYAT and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Maple Leaf
The main advantage of trading using opposite BANK RAKYAT and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| BANK RAKYAT vs. Insurance Australia Group | BANK RAKYAT vs. Consolidated Communications Holdings | BANK RAKYAT vs. Ribbon Communications | BANK RAKYAT vs. Universal Display |
| Maple Leaf vs. MAGNUM MINING EXP | Maple Leaf vs. Thai Beverage Public | Maple Leaf vs. X FAB Silicon Foundries | Maple Leaf vs. MACOM Technology Solutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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