Correlation Between US Physical and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both US Physical 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 US Physical and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Physical Therapy and BANK RAKYAT IND, you can compare the effects of market volatilities on US Physical 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 US Physical with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Physical and BANK RAKYAT.
Diversification Opportunities for US Physical and BANK RAKYAT
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UPH and BANK is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding US Physical Therapy 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 US Physical 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 US Physical Therapy 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 US Physical i.e., US Physical and BANK RAKYAT go up and down completely randomly.
Pair Corralation between US Physical and BANK RAKYAT
Assuming the 90 days horizon US Physical Therapy is expected to under-perform the BANK RAKYAT. But the stock apears to be less risky and, when comparing its historical volatility, US Physical Therapy is 2.09 times less risky than BANK RAKYAT. The stock trades about -0.14 of its potential returns per unit of risk. The BANK RAKYAT IND is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 22.00 in BANK RAKYAT IND on October 25, 2024 and sell it today you would earn a total of 1.00 from holding BANK RAKYAT IND or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Physical Therapy vs. BANK RAKYAT IND
Performance |
| Timeline |
| US Physical Therapy |
| BANK RAKYAT IND |
US Physical and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Physical and BANK RAKYAT
The main advantage of trading using opposite US Physical and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Physical 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.| US Physical vs. Fresenius Medical Care | US Physical vs. Chemed | US Physical vs. Superior Plus Corp | US Physical vs. Origin Agritech |
| BANK RAKYAT vs. Entravision Communications | BANK RAKYAT vs. CITIC Telecom International | BANK RAKYAT vs. COFCO Joycome Foods | BANK RAKYAT vs. TELECOM ITALIA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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