Correlation Between BANK RAKYAT and Meiko Electronics
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Meiko Electronics 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 Meiko Electronics 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 Meiko Electronics Co, you can compare the effects of market volatilities on BANK RAKYAT and Meiko Electronics 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 Meiko Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Meiko Electronics.
Diversification Opportunities for BANK RAKYAT and Meiko Electronics
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Meiko is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Meiko Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiko Electronics 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 Meiko Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiko Electronics has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Meiko Electronics go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Meiko Electronics
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Meiko Electronics. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 2.27 times less risky than Meiko Electronics. The stock trades about -0.07 of its potential returns per unit of risk. The Meiko Electronics Co is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,620 in Meiko Electronics Co on August 28, 2024 and sell it today you would earn a total of 1,830 from holding Meiko Electronics Co or generate 50.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Meiko Electronics Co
Performance |
| Timeline |
| BANK RAKYAT IND |
| Meiko Electronics |
BANK RAKYAT and Meiko Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Meiko Electronics
The main advantage of trading using opposite BANK RAKYAT and Meiko Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Meiko Electronics 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 Meiko Electronics will offset losses from the drop in Meiko Electronics' long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Microsoft |
| Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. NMI Holdings | Meiko Electronics vs. Origin Agritech | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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