Correlation Between Bank Central and ROC Energy
Can any of the company-specific risk be diversified away by investing in both Bank Central and ROC Energy 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 Central and ROC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and ROC Energy Acquisition, you can compare the effects of market volatilities on Bank Central and ROC Energy 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 Central with a short position of ROC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and ROC Energy.
Diversification Opportunities for Bank Central and ROC Energy
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and ROC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and ROC Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROC Energy Acquisition and Bank Central 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 Central Asia are associated (or correlated) with ROC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROC Energy Acquisition has no effect on the direction of Bank Central i.e., Bank Central and ROC Energy go up and down completely randomly.
Pair Corralation between Bank Central and ROC Energy
Assuming the 90 days horizon Bank Central Asia is expected to generate 0.13 times more return on investment than ROC Energy. However, Bank Central Asia is 7.81 times less risky than ROC Energy. It trades about 0.02 of its potential returns per unit of risk. ROC Energy Acquisition is currently generating about -0.05 per unit of risk. If you would invest 1,497 in Bank Central Asia on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Bank Central Asia or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.88% |
| Values | Daily Returns |
Bank Central Asia vs. ROC Energy Acquisition
Performance |
| Timeline |
| Bank Central Asia |
| ROC Energy Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and ROC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and ROC Energy
The main advantage of trading using opposite Bank Central and ROC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, ROC Energy 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 ROC Energy will offset losses from the drop in ROC Energy's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| ROC Energy vs. Canlan Ice Sports | ROC Energy vs. Summa Silver Corp | ROC Energy vs. Harmony Gold Mining | ROC Energy vs. Vindicator Silver Lead Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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