Correlation Between United States and BANK RAKYAT

Can any of the company-specific risk be diversified away by investing in both United States 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 United States and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United States Steel and BANK RAKYAT IND, you can compare the effects of market volatilities on United States 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 United States with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and BANK RAKYAT.

Diversification Opportunities for United States and BANK RAKYAT

-0.46

Correlation Coefficient

United States  BANK RAKYAT

Very good diversification

The 3 months correlation between United and BANK is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel 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 United States 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 United States Steel 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 United States i.e., United States and BANK RAKYAT go up and down completely randomly.

Pair Corralation between United States and BANK RAKYAT

Assuming the 90 days trading horizon United States Steel is expected to generate 0.9 times more return on investment than BANK RAKYAT. However, United States Steel is 1.12 times less risky than BANK RAKYAT. It trades about 0.06 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.08 per unit of risk. If you would invest  3,058  in United States Steel on September 12, 2024 and sell it today you would earn a total of  242.00  from holding United States Steel or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

United States Steel  vs.  BANK RAKYAT IND

United States Steel

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BANK RAKYAT IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK RAKYAT IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with United States and BANK RAKYAT

The main advantage of trading using opposite United States and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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 United States Steel and BANK RAKYAT IND 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.