Correlation Between BANK RAKYAT and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and T.J. Maxx 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 T.J. Maxx 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 The TJX Companies, you can compare the effects of market volatilities on BANK RAKYAT and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and T.J. Maxx.
Diversification Opportunities for BANK RAKYAT and T.J. Maxx
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and T.J. is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and T.J. Maxx go up and down completely randomly.
Pair Corralation between BANK RAKYAT and T.J. Maxx
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the T.J. Maxx. In addition to that, BANK RAKYAT is 1.54 times more volatile than The TJX Companies. It trades about -0.14 of its total potential returns per unit of risk. The TJX Companies is currently generating about 0.4 per unit of volatility. If you would invest 10,452 in The TJX Companies on August 30, 2024 and sell it today you would earn a total of 1,558 from holding The TJX Companies or generate 14.91% 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. The TJX Companies
Performance |
| Timeline |
| BANK RAKYAT IND |
| TJX Companies |
BANK RAKYAT and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and T.J. Maxx
The main advantage of trading using opposite BANK RAKYAT and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.| BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Apple Inc | BANK RAKYAT vs. Superior Plus Corp | BANK RAKYAT vs. SIVERS SEMICONDUCTORS AB |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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