Correlation Between BANK RAKYAT and LASSONDE INDUSTINC
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and LASSONDE INDUSTINC 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 LASSONDE INDUSTINC 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 LASSONDE INDUSTINC A, you can compare the effects of market volatilities on BANK RAKYAT and LASSONDE INDUSTINC 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 LASSONDE INDUSTINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and LASSONDE INDUSTINC.
Diversification Opportunities for BANK RAKYAT and LASSONDE INDUSTINC
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and LASSONDE is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and LASSONDE INDUSTINC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LASSONDE INDUSTINC 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 LASSONDE INDUSTINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LASSONDE INDUSTINC has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and LASSONDE INDUSTINC go up and down completely randomly.
Pair Corralation between BANK RAKYAT and LASSONDE INDUSTINC
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the LASSONDE INDUSTINC. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.36 times less risky than LASSONDE INDUSTINC. The stock trades about -0.02 of its potential returns per unit of risk. The LASSONDE INDUSTINC A is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,325 in LASSONDE INDUSTINC A on September 3, 2024 and sell it today you would earn a total of 3,475 from holding LASSONDE INDUSTINC A or generate 41.74% 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. LASSONDE INDUSTINC A
Performance |
| Timeline |
| BANK RAKYAT IND |
| LASSONDE INDUSTINC |
BANK RAKYAT and LASSONDE INDUSTINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and LASSONDE INDUSTINC
The main advantage of trading using opposite BANK RAKYAT and LASSONDE INDUSTINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, LASSONDE INDUSTINC 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 LASSONDE INDUSTINC will offset losses from the drop in LASSONDE INDUSTINC's long position.| BANK RAKYAT vs. INFORMATION SVC GRP | BANK RAKYAT vs. Datang International Power | BANK RAKYAT vs. CENTURIA OFFICE REIT | BANK RAKYAT vs. Autohome ADR |
| LASSONDE INDUSTINC vs. SBI Insurance Group | LASSONDE INDUSTINC vs. REVO INSURANCE SPA | LASSONDE INDUSTINC vs. United Insurance Holdings | LASSONDE INDUSTINC vs. Singapore Reinsurance |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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