Correlation Between BANK RAKYAT and ASX
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and ASX 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 ASX 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 ASX Limited, you can compare the effects of market volatilities on BANK RAKYAT and ASX 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 ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and ASX.
Diversification Opportunities for BANK RAKYAT and ASX
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and ASX is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and ASX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX Limited 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 ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX Limited has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and ASX go up and down completely randomly.
Pair Corralation between BANK RAKYAT and ASX
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the ASX. In addition to that, BANK RAKYAT is 1.42 times more volatile than ASX Limited. It trades about -0.07 of its total potential returns per unit of risk. ASX Limited is currently generating about 0.05 per unit of volatility. If you would invest 3,558 in ASX Limited on September 14, 2024 and sell it today you would earn a total of 502.00 from holding ASX Limited or generate 14.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
BANK RAKYAT IND vs. ASX Limited
Performance |
| Timeline |
| BANK RAKYAT IND |
| ASX Limited |
BANK RAKYAT and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and ASX
The main advantage of trading using opposite BANK RAKYAT and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| BANK RAKYAT vs. Entravision Communications | BANK RAKYAT vs. Universal Display | BANK RAKYAT vs. Computer And Technologies | BANK RAKYAT vs. Highlight Communications AG |
| ASX vs. CME Group | ASX vs. Intercontinental Exchange | ASX vs. Hong Kong Exchanges | ASX vs. London Stock Exchange |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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