Correlation Between BANK RAKYAT and AURUBIS AG
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and AURUBIS AG 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 AURUBIS AG 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 AURUBIS AG UNSPADR, you can compare the effects of market volatilities on BANK RAKYAT and AURUBIS AG 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 AURUBIS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and AURUBIS AG.
Diversification Opportunities for BANK RAKYAT and AURUBIS AG
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and AURUBIS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and AURUBIS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS AG UNSPADR 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 AURUBIS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS AG UNSPADR has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and AURUBIS AG go up and down completely randomly.
Pair Corralation between BANK RAKYAT and AURUBIS AG
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the AURUBIS AG. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.88 times less risky than AURUBIS AG. The stock trades about -0.21 of its potential returns per unit of risk. The AURUBIS AG UNSPADR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,100 in AURUBIS AG UNSPADR on September 13, 2024 and sell it today you would lose (60.00) from holding AURUBIS AG UNSPADR or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. AURUBIS AG UNSPADR
Performance |
| Timeline |
| BANK RAKYAT IND |
| AURUBIS AG UNSPADR |
BANK RAKYAT and AURUBIS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and AURUBIS AG
The main advantage of trading using opposite BANK RAKYAT and AURUBIS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, AURUBIS AG 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 AURUBIS AG will offset losses from the drop in AURUBIS AG'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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