Correlation Between Plastic Omnium and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and BANK RAKYAT 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 Plastic Omnium and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and BANK RAKYAT IND, you can compare the effects of market volatilities on Plastic Omnium and BANK RAKYAT 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 Plastic Omnium with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and BANK RAKYAT.
Diversification Opportunities for Plastic Omnium and BANK RAKYAT
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and BANK is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Plastic Omnium and BANK RAKYAT
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 0.87 times more return on investment than BANK RAKYAT. However, Plastic Omnium is 1.15 times less risky than BANK RAKYAT. It trades about 0.16 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.1 per unit of risk. If you would invest 986.00 in Plastic Omnium on October 11, 2024 and sell it today you would earn a total of 52.00 from holding Plastic Omnium or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. BANK RAKYAT IND
Performance |
| Timeline |
| Plastic Omnium |
| BANK RAKYAT IND |
Plastic Omnium and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and BANK RAKYAT
The main advantage of trading using opposite Plastic Omnium and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Plastic Omnium vs. Singapore Reinsurance | Plastic Omnium vs. Dentsply Sirona | Plastic Omnium vs. NEW MILLENNIUM IRON | Plastic Omnium vs. VIENNA INSURANCE GR |
| BANK RAKYAT vs. Plastic Omnium | BANK RAKYAT vs. Heidelberg Materials AG | BANK RAKYAT vs. CVB Financial Corp | BANK RAKYAT vs. Mitsubishi Materials |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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