Correlation Between BANK RAKYAT and Origin Energy
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Origin Energy 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 Origin Energy 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 Origin Energy Limited, you can compare the effects of market volatilities on BANK RAKYAT and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Origin Energy.
Diversification Opportunities for BANK RAKYAT and Origin Energy
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Origin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Origin Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy Limited 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy Limited has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Origin Energy go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Origin Energy
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Origin Energy. In addition to that, BANK RAKYAT is 1.03 times more volatile than Origin Energy Limited. It trades about -0.08 of its total potential returns per unit of risk. Origin Energy Limited is currently generating about -0.08 per unit of volatility. If you would invest 645.00 in Origin Energy Limited on November 3, 2024 and sell it today you would lose (25.00) from holding Origin Energy Limited or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Origin Energy Limited
Performance |
| Timeline |
| BANK RAKYAT IND |
| Origin Energy Limited |
BANK RAKYAT and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Origin Energy
The main advantage of trading using opposite BANK RAKYAT and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| BANK RAKYAT vs. MOUNT GIBSON IRON | BANK RAKYAT vs. The Japan Steel | BANK RAKYAT vs. WESANA HEALTH HOLD | BANK RAKYAT vs. DENTSPLY SIRONA |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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