Correlation Between Red Cat and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Red Cat 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 Red Cat and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Cat Holdings and Bank Rakyat, you can compare the effects of market volatilities on Red Cat 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 Red Cat with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Cat and Bank Rakyat.
Diversification Opportunities for Red Cat and Bank Rakyat
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Red and Bank is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Red Cat Holdings and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat and Red Cat 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 Red Cat Holdings 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 has no effect on the direction of Red Cat i.e., Red Cat and Bank Rakyat go up and down completely randomly.
Pair Corralation between Red Cat and Bank Rakyat
Given the investment horizon of 90 days Red Cat Holdings is expected to generate 3.97 times more return on investment than Bank Rakyat. However, Red Cat is 3.97 times more volatile than Bank Rakyat. It trades about 0.09 of its potential returns per unit of risk. Bank Rakyat is currently generating about -0.01 per unit of risk. If you would invest 131.00 in Red Cat Holdings on November 19, 2024 and sell it today you would earn a total of 761.00 from holding Red Cat Holdings or generate 580.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Red Cat Holdings vs. Bank Rakyat
Performance |
| Timeline |
| Red Cat Holdings |
| Bank Rakyat |
Red Cat and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Cat and Bank Rakyat
The main advantage of trading using opposite Red Cat and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Cat 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.| Red Cat vs. Quantum Computing | Red Cat vs. Rigetti Computing | Red Cat vs. D Wave Quantum | Red Cat vs. AstroNova |
| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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