Correlation Between BANK RAKYAT and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Dominion 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 RAKYAT and Dominion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK RAKYAT IND and Dominion Energy, you can compare the effects of market volatilities on BANK RAKYAT and Dominion 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 RAKYAT with a short position of Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Dominion Energy.
Diversification Opportunities for BANK RAKYAT and Dominion Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and Dominion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy 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 IND are associated (or correlated) with Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Dominion Energy go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Dominion Energy
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Dominion Energy. In addition to that, BANK RAKYAT is 1.59 times more volatile than Dominion Energy. It trades about -0.19 of its total potential returns per unit of risk. Dominion Energy is currently generating about 0.0 per unit of volatility. If you would invest 5,180 in Dominion Energy on September 17, 2024 and sell it today you would lose (40.00) from holding Dominion Energy or give up 0.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BANK RAKYAT IND vs. Dominion Energy
Performance |
Timeline |
BANK RAKYAT IND |
Dominion Energy |
BANK RAKYAT and Dominion Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and Dominion Energy
The main advantage of trading using opposite BANK RAKYAT and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Dominion 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.BANK RAKYAT vs. G8 EDUCATION | BANK RAKYAT vs. Natural Health Trends | BANK RAKYAT vs. Adtalem Global Education | BANK RAKYAT vs. DeVry Education Group |
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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 Managers module to screen money managers from public funds and ETFs managed around the world.
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