Correlation Between Highlight Communications and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and BANK RAKYAT IND, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and BANK RAKYAT.
Diversification Opportunities for Highlight Communications and BANK RAKYAT
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highlight and BANK is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Highlight Communications and BANK RAKYAT
If you would invest 93.00 in Highlight Communications AG on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Highlight Communications AG or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. BANK RAKYAT IND
Performance |
| Timeline |
| Highlight Communications |
| BANK RAKYAT IND |
Highlight Communications and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and BANK RAKYAT
The main advantage of trading using opposite Highlight Communications and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.The idea behind Highlight Communications AG and BANK RAKYAT IND pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BANK RAKYAT vs. INFORMATION SVC GRP | BANK RAKYAT vs. Datang International Power | BANK RAKYAT vs. CENTURIA OFFICE REIT | BANK RAKYAT vs. Autohome ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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