Correlation Between BANK RAKYAT and LTC Properties
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and LTC Properties 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 LTC Properties 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 LTC Properties, you can compare the effects of market volatilities on BANK RAKYAT and LTC Properties 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 LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and LTC Properties.
Diversification Opportunities for BANK RAKYAT and LTC Properties
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BANK and LTC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC Properties 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 LTC Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LTC Properties has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and LTC Properties go up and down completely randomly.
Pair Corralation between BANK RAKYAT and LTC Properties
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the LTC Properties. In addition to that, BANK RAKYAT is 1.48 times more volatile than LTC Properties. It trades about 0.0 of its total potential returns per unit of risk. LTC Properties is currently generating about 0.03 per unit of volatility. If you would invest 2,846 in LTC Properties on November 27, 2024 and sell it today you would earn a total of 468.00 from holding LTC Properties or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
BANK RAKYAT IND vs. LTC Properties
Performance |
| Timeline |
| BANK RAKYAT IND |
| LTC Properties |
BANK RAKYAT and LTC Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and LTC Properties
The main advantage of trading using opposite BANK RAKYAT and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, LTC Properties 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 LTC Properties will offset losses from the drop in LTC Properties' long position.| BANK RAKYAT vs. BURLINGTON STORES | BANK RAKYAT vs. KENEDIX OFFICE INV | BANK RAKYAT vs. 24SEVENOFFICE GROUP AB | BANK RAKYAT vs. INVITATION HOMES DL |
| LTC Properties vs. Adtalem Global Education | LTC Properties vs. ANGANG STEEL H | LTC Properties vs. IRONVELD PLC LS | LTC Properties vs. Veolia Environnement SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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