Correlation Between BANK RAKYAT and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Lundin Mining 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 Lundin Mining 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 Lundin Mining, you can compare the effects of market volatilities on BANK RAKYAT and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Lundin Mining.
Diversification Opportunities for BANK RAKYAT and Lundin Mining
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Lundin is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Lundin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Lundin Mining go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Lundin Mining
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Lundin Mining. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.25 times less risky than Lundin Mining. The stock trades about -0.21 of its potential returns per unit of risk. The Lundin Mining is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 906.00 in Lundin Mining on September 13, 2024 and sell it today you would lose (15.00) from holding Lundin Mining or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Lundin Mining
Performance |
| Timeline |
| BANK RAKYAT IND |
| Lundin Mining |
BANK RAKYAT and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Lundin Mining
The main advantage of trading using opposite BANK RAKYAT and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| BANK RAKYAT vs. Salesforce | BANK RAKYAT vs. Fast Retailing Co | BANK RAKYAT vs. The Trade Desk | BANK RAKYAT vs. AM EAGLE OUTFITTERS |
| Lundin Mining vs. Southern Copper | Lundin Mining vs. Sandfire Resources Limited | Lundin Mining vs. Superior Plus Corp | Lundin Mining vs. NMI Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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