Correlation Between BANK RAKYAT and EON SE
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and EON SE 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 EON SE 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 EON SE, you can compare the effects of market volatilities on BANK RAKYAT and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and EON SE.
Diversification Opportunities for BANK RAKYAT and EON SE
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and EON is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and EON SE go up and down completely randomly.
Pair Corralation between BANK RAKYAT and EON SE
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the EON SE. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.08 times less risky than EON SE. The stock trades about -0.01 of its potential returns per unit of risk. The EON SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 821.00 in EON SE on September 4, 2024 and sell it today you would earn a total of 369.00 from holding EON SE or generate 44.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. EON SE
Performance |
| Timeline |
| BANK RAKYAT IND |
| EON SE |
BANK RAKYAT and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and EON SE
The main advantage of trading using opposite BANK RAKYAT and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| BANK RAKYAT vs. DFS Furniture PLC | BANK RAKYAT vs. Beazer Homes USA | BANK RAKYAT vs. GOLD ROAD RES | BANK RAKYAT vs. QUEEN S ROAD |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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