Correlation Between BANK RAKYAT and First Quantum
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and First Quantum 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 First Quantum 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 First Quantum Minerals, you can compare the effects of market volatilities on BANK RAKYAT and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and First Quantum.
Diversification Opportunities for BANK RAKYAT and First Quantum
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and First is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and First Quantum go up and down completely randomly.
Pair Corralation between BANK RAKYAT and First Quantum
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the First Quantum. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.51 times less risky than First Quantum. The stock trades about -0.21 of its potential returns per unit of risk. The First Quantum Minerals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,321 in First Quantum Minerals on September 12, 2024 and sell it today you would earn a total of 38.00 from holding First Quantum Minerals or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. First Quantum Minerals
Performance |
| Timeline |
| BANK RAKYAT IND |
| First Quantum Minerals |
BANK RAKYAT and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and First Quantum
The main advantage of trading using opposite BANK RAKYAT and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.| BANK RAKYAT vs. ALGOMA STEEL GROUP | BANK RAKYAT vs. CVW CLEANTECH INC | BANK RAKYAT vs. ULTRA CLEAN HLDGS | BANK RAKYAT vs. United States Steel |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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