Correlation Between BANK RAKYAT and CME

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

Diversification Opportunities for BANK RAKYAT and CME

-0.79
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between BANK and CME is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and CME go up and down completely randomly.

Pair Corralation between BANK RAKYAT and CME

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the CME. In addition to that, BANK RAKYAT is 1.06 times more volatile than CME Group. It trades about -0.22 of its total potential returns per unit of risk. CME Group is currently generating about 0.17 per unit of volatility. If you would invest  20,397  in CME Group on September 13, 2024 and sell it today you would earn a total of  2,303  from holding CME Group or generate 11.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

BANK RAKYAT IND  vs.  CME Group

 Performance 
       Timeline  
BANK RAKYAT IND 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
CME Group 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CME Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CME reported solid returns over the last few months and may actually be approaching a breakup point.

BANK RAKYAT and CME Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BANK RAKYAT and CME

The main advantage of trading using opposite BANK RAKYAT and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.
The idea behind BANK RAKYAT IND and CME Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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