Correlation Between BANK RAKYAT and Mapfre SA
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Mapfre SA 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 Mapfre SA 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 Mapfre SA, you can compare the effects of market volatilities on BANK RAKYAT and Mapfre SA 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 Mapfre SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Mapfre SA.
Diversification Opportunities for BANK RAKYAT and Mapfre SA
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Mapfre is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Mapfre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre SA 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 Mapfre SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre SA has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Mapfre SA go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Mapfre SA
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Mapfre SA. In addition to that, BANK RAKYAT is 1.27 times more volatile than Mapfre SA. It trades about -0.04 of its total potential returns per unit of risk. Mapfre SA is currently generating about 0.09 per unit of volatility. If you would invest 177.00 in Mapfre SA on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Mapfre SA or generate 40.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Mapfre SA
Performance |
| Timeline |
| BANK RAKYAT IND |
| Mapfre SA |
BANK RAKYAT and Mapfre SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Mapfre SA
The main advantage of trading using opposite BANK RAKYAT and Mapfre SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Mapfre SA 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 Mapfre SA will offset losses from the drop in Mapfre SA'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 |
| Mapfre SA vs. First American Financial | Mapfre SA vs. MGIC Investment | Mapfre SA vs. Lancashire Holdings Limited | Mapfre SA vs. Trisura 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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