Correlation Between Bank Rakyat and Eco Growth
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Eco Growth 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 Rakyat and Eco Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Eco Growth Strategies, you can compare the effects of market volatilities on Bank Rakyat and Eco Growth 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 Rakyat with a short position of Eco Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Eco Growth.
Diversification Opportunities for Bank Rakyat and Eco Growth
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Eco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Eco Growth Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Growth Strategies and Bank Rakyat 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 Rakyat are associated (or correlated) with Eco Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Growth Strategies has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Eco Growth go up and down completely randomly.
Pair Corralation between Bank Rakyat and Eco Growth
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Eco Growth. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 21.53 times less risky than Eco Growth. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Eco Growth Strategies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Eco Growth Strategies on September 17, 2024 and sell it today you would lose (1.00) from holding Eco Growth Strategies or give up 20.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Rakyat vs. Eco Growth Strategies
Performance |
Timeline |
Bank Rakyat |
Eco Growth Strategies |
Bank Rakyat and Eco Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Rakyat and Eco Growth
The main advantage of trading using opposite Bank Rakyat and Eco Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Eco Growth 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 Eco Growth will offset losses from the drop in Eco Growth's long position.Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
Eco Growth vs. WiMi Hologram Cloud | Eco Growth vs. Assurant | Eco Growth vs. Getty Images Holdings | Eco Growth vs. National CineMedia |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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