Correlation Between RETAIL FOOD and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD 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 RETAIL FOOD and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and BANK RAKYAT IND, you can compare the effects of market volatilities on RETAIL FOOD 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 RETAIL FOOD with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and BANK RAKYAT.
Diversification Opportunities for RETAIL FOOD and BANK RAKYAT
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RETAIL and BANK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP 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 RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and BANK RAKYAT go up and down completely randomly.
Pair Corralation between RETAIL FOOD and BANK RAKYAT
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the BANK RAKYAT. In addition to that, RETAIL FOOD is 12.7 times more volatile than BANK RAKYAT IND. It trades about -0.23 of its total potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.21 per unit of volatility. If you would invest 26.00 in BANK RAKYAT IND on September 13, 2024 and sell it today you would lose (2.00) from holding BANK RAKYAT IND or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. BANK RAKYAT IND
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| BANK RAKYAT IND |
RETAIL FOOD and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and BANK RAKYAT
The main advantage of trading using opposite RETAIL FOOD and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| BANK RAKYAT vs. Salesforce | BANK RAKYAT vs. Fast Retailing Co | BANK RAKYAT vs. The Trade Desk | BANK RAKYAT vs. AM EAGLE OUTFITTERS |
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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