Correlation Between BANK RAKYAT and China Railway
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and China Railway 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 China Railway 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 China Railway Group, you can compare the effects of market volatilities on BANK RAKYAT and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and China Railway.
Diversification Opportunities for BANK RAKYAT and China Railway
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and China is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and China Railway go up and down completely randomly.
Pair Corralation between BANK RAKYAT and China Railway
If you would invest 26.00 in BANK RAKYAT IND on September 2, 2024 and sell it today you would earn a total of 0.00 from holding BANK RAKYAT IND or generate 0.0% 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. China Railway Group
Performance |
| Timeline |
| BANK RAKYAT IND |
| China Railway Group |
BANK RAKYAT and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and China Railway
The main advantage of trading using opposite BANK RAKYAT and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| BANK RAKYAT vs. American Public Education | BANK RAKYAT vs. CARSALESCOM | BANK RAKYAT vs. Gruppo Mutuionline SpA | BANK RAKYAT vs. Western Copper and |
| China Railway vs. Perdoceo Education | China Railway vs. Spirent Communications plc | China Railway vs. Consolidated Communications Holdings | China Railway vs. Sims Metal Management |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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