Correlation Between Bank Rakyat and Crescera Capital

Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Crescera Capital 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 Crescera Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Rakyat and Crescera Capital Acquisition, you can compare the effects of market volatilities on Bank Rakyat and Crescera Capital 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 Crescera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Crescera Capital.

Diversification Opportunities for Bank Rakyat and Crescera Capital

0.0

Correlation Coefficient

Bank Rakyat  Crescera Capital

Pay attention - limited upside

The 3 months correlation between Bank and Crescera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Crescera Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescera Capital Acq 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 Crescera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescera Capital Acq has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Crescera Capital go up and down completely randomly.

Pair Corralation between Bank Rakyat and Crescera Capital

If you would invest (100.00) in Crescera Capital Acquisition on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Crescera Capital Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Rakyat  vs.  Crescera Capital Acquisition

Bank Rakyat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Bank Rakyat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crescera Capital Acq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crescera Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Crescera Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank Rakyat and Crescera Capital

The main advantage of trading using opposite Bank Rakyat and Crescera Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Crescera Capital 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 Crescera Capital will offset losses from the drop in Crescera Capital's long position.

The idea behind Bank Rakyat and Crescera Capital Acquisition 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 Transaction History module to view history of all your transactions and understand their impact on performance.