Correlation Between BANK RAKYAT and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Scottish Mortgage 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 Scottish Mortgage 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 Scottish Mortgage Investment, you can compare the effects of market volatilities on BANK RAKYAT and Scottish Mortgage 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 Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Scottish Mortgage.
Diversification Opportunities for BANK RAKYAT and Scottish Mortgage
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Scottish is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage 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 Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Scottish Mortgage go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Scottish Mortgage
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 14.77 times less return on investment than Scottish Mortgage. In addition to that, BANK RAKYAT is 2.52 times more volatile than Scottish Mortgage Investment. It trades about 0.01 of its total potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.45 per unit of volatility. If you would invest 1,141 in Scottish Mortgage Investment on October 24, 2024 and sell it today you would earn a total of 89.00 from holding Scottish Mortgage Investment or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Scottish Mortgage Investment
Performance |
| Timeline |
| BANK RAKYAT IND |
| Scottish Mortgage |
BANK RAKYAT and Scottish Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Scottish Mortgage
The main advantage of trading using opposite BANK RAKYAT and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.| BANK RAKYAT vs. Tsingtao Brewery | BANK RAKYAT vs. Fevertree Drinks PLC | BANK RAKYAT vs. Nufarm Limited | BANK RAKYAT vs. China Resources Beer |
| Scottish Mortgage vs. MOBILE FACTORY INC | Scottish Mortgage vs. Jacquet Metal Service | Scottish Mortgage vs. Geely Automobile Holdings | Scottish Mortgage vs. T Mobile |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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