Correlation Between BANK RAKYAT and Securitas
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Securitas 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 Securitas 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 Securitas AB, you can compare the effects of market volatilities on BANK RAKYAT and Securitas 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 Securitas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Securitas.
Diversification Opportunities for BANK RAKYAT and Securitas
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Securitas is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB 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 Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Securitas go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Securitas
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 2.8 times more return on investment than Securitas. However, BANK RAKYAT is 2.8 times more volatile than Securitas AB. It trades about -0.1 of its potential returns per unit of risk. Securitas AB is currently generating about -0.3 per unit of risk. If you would invest 24.00 in BANK RAKYAT IND on October 16, 2024 and sell it today you would lose (1.00) from holding BANK RAKYAT IND or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
BANK RAKYAT IND vs. Securitas AB
Performance |
| Timeline |
| BANK RAKYAT IND |
| Securitas AB |
BANK RAKYAT and Securitas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and Securitas
The main advantage of trading using opposite BANK RAKYAT and Securitas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Securitas 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 Securitas will offset losses from the drop in Securitas' long position.| BANK RAKYAT vs. Ribbon Communications | BANK RAKYAT vs. Rocket Internet SE | BANK RAKYAT vs. Liberty Broadband | BANK RAKYAT vs. COMPUTERSHARE |
| Securitas vs. ASSA ABLOY AB | Securitas vs. Halma plc | Securitas vs. Allegion plc | Securitas vs. Superior Plus Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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