Correlation Between BANK RAKYAT and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Goldman Sachs 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 Goldman Sachs 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 The Goldman Sachs, you can compare the effects of market volatilities on BANK RAKYAT and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Goldman Sachs.
Diversification Opportunities for BANK RAKYAT and Goldman Sachs
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and Goldman is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Goldman Sachs go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Goldman Sachs
Assuming the 90 days trading horizon BANK RAKYAT is expected to generate 22.51 times less return on investment than Goldman Sachs. In addition to that, BANK RAKYAT is 1.12 times more volatile than The Goldman Sachs. It trades about 0.01 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.28 per unit of volatility. If you would invest 55,240 in The Goldman Sachs on October 31, 2024 and sell it today you would earn a total of 6,520 from holding The Goldman Sachs or generate 11.8% 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. The Goldman Sachs
Performance |
| Timeline |
| BANK RAKYAT IND |
| Goldman Sachs |
BANK RAKYAT and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Goldman Sachs
The main advantage of trading using opposite BANK RAKYAT and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| BANK RAKYAT vs. AAC TECHNOLOGHLDGADR | BANK RAKYAT vs. Sun Life Financial | BANK RAKYAT vs. Agilent Technologies | BANK RAKYAT vs. Minerals Technologies |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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