Correlation Between BANK RAKYAT and CME
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and CME 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 CME 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 CME Group, you can compare the effects of market volatilities on BANK RAKYAT and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and CME.
Diversification Opportunities for BANK RAKYAT and CME
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and CME is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and CME go up and down completely randomly.
Pair Corralation between BANK RAKYAT and CME
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the CME. In addition to that, BANK RAKYAT is 1.78 times more volatile than CME Group. It trades about -0.08 of its total potential returns per unit of risk. CME Group is currently generating about 0.28 per unit of volatility. If you would invest 20,949 in CME Group on September 12, 2024 and sell it today you would earn a total of 1,516 from holding CME Group or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. CME Group
Performance |
| Timeline |
| BANK RAKYAT IND |
| CME Group |
BANK RAKYAT and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and CME
The main advantage of trading using opposite BANK RAKYAT and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| BANK RAKYAT vs. DICKER DATA LTD | BANK RAKYAT vs. DATANG INTL POW | BANK RAKYAT vs. Evolution Mining Limited | BANK RAKYAT vs. Scandinavian Tobacco Group |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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