Correlation Between BANK RAKYAT and Spacetalk

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Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Spacetalk 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 Spacetalk 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 Spacetalk, you can compare the effects of market volatilities on BANK RAKYAT and Spacetalk 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 Spacetalk. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Spacetalk.

Diversification Opportunities for BANK RAKYAT and Spacetalk

BANKSpacetalkDiversified AwayBANKSpacetalkDiversified Away100%
-0.87
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BANK and Spacetalk is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Spacetalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spacetalk 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 Spacetalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spacetalk has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Spacetalk go up and down completely randomly.

Pair Corralation between BANK RAKYAT and Spacetalk

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Spacetalk. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 20.64 times less risky than Spacetalk. The stock trades about -0.01 of its potential returns per unit of risk. The Spacetalk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Spacetalk on November 21, 2024 and sell it today you would lose (7.05) from holding Spacetalk or give up 44.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy98.8%
ValuesDaily Returns

BANK RAKYAT IND  vs.  Spacetalk

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -2002040
JavaScript chart by amCharts 3.21.15BYRA EZY
       Timeline  
BANK RAKYAT IND 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days BANK RAKYAT IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.230.2350.240.2450.250.2550.26
Spacetalk 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Spacetalk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Spacetalk reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.060.070.080.090.10.11

BANK RAKYAT and Spacetalk Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.58-1.93-1.28-0.640.00.591.21.82.4 0.050.100.15
JavaScript chart by amCharts 3.21.15BYRA EZY
       Returns  

Pair Trading with BANK RAKYAT and Spacetalk

The main advantage of trading using opposite BANK RAKYAT and Spacetalk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Spacetalk 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 Spacetalk will offset losses from the drop in Spacetalk's long position.
The idea behind BANK RAKYAT IND and Spacetalk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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