Correlation Between TVA and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both TVA 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 TVA and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TVA Group and Bank Rakyat, you can compare the effects of market volatilities on TVA 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 TVA with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of TVA and Bank Rakyat.
Diversification Opportunities for TVA and Bank Rakyat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TVA and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TVA Group and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat and TVA 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 TVA 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 has no effect on the direction of TVA i.e., TVA and Bank Rakyat go up and down completely randomly.
Pair Corralation between TVA and Bank Rakyat
If you would invest 85.00 in TVA Group on November 27, 2024 and sell it today you would earn a total of 0.00 from holding TVA Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
TVA Group vs. Bank Rakyat
Performance |
| Timeline |
| TVA Group |
| Bank Rakyat |
TVA and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TVA and Bank Rakyat
The main advantage of trading using opposite TVA and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TVA 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 TVA Group and Bank Rakyat 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. 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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