Correlation Between BANK RAKYAT and IRPC Public
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and IRPC Public 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 IRPC Public 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 IRPC Public, you can compare the effects of market volatilities on BANK RAKYAT and IRPC Public 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 IRPC Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and IRPC Public.
Diversification Opportunities for BANK RAKYAT and IRPC Public
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BANK and IRPC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and IRPC Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRPC Public 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 IRPC Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRPC Public has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and IRPC Public go up and down completely randomly.
Pair Corralation between BANK RAKYAT and IRPC Public
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 0.1 times more return on investment than IRPC Public. However, BANK RAKYAT IND is 10.5 times less risky than IRPC Public. It trades about 0.24 of its potential returns per unit of risk. IRPC Public is currently generating about -0.01 per unit of risk. If you would invest 24.00 in BANK RAKYAT IND on October 7, 2024 and sell it today you would earn a total of 1.00 from holding BANK RAKYAT IND or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK RAKYAT IND vs. IRPC Public
Performance |
| Timeline |
| BANK RAKYAT IND |
| IRPC Public |
BANK RAKYAT and IRPC Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK RAKYAT and IRPC Public
The main advantage of trading using opposite BANK RAKYAT and IRPC Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, IRPC Public 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 IRPC Public will offset losses from the drop in IRPC Public's long position.| BANK RAKYAT vs. Fair Isaac Corp | BANK RAKYAT vs. Corsair Gaming | BANK RAKYAT vs. Meiko Electronics Co | BANK RAKYAT vs. Methode Electronics |
| IRPC Public vs. IRPC PCL NVDR | IRPC Public vs. Sinopec Shanghai Petrochemical | IRPC Public vs. China Petroleum Chemical | IRPC Public vs. PetroChina Company Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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