Correlation Between Bank Rakyat and Crew Energy

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

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

Diversification Opportunities for Bank Rakyat and Crew Energy

-0.79

Correlation Coefficient

Bank Rakyat  Crew Energy

Pay attention - limited upside

The 3 months correlation between Bank and Crew is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Crew Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crew 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 are associated (or correlated) with Crew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crew Energy has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Crew Energy go up and down completely randomly.

Pair Corralation between Bank Rakyat and Crew Energy

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Crew Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 4.6 times less risky than Crew Energy. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Crew Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  317.00  in Crew Energy on August 31, 2024 and sell it today you would earn a total of  234.00  from holding Crew Energy or generate 73.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	68.5%
Values	Daily Returns

Bank Rakyat  vs.  Crew Energy

Bank Rakyat

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Crew Energy

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Crew Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, Crew Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Rakyat and Crew Energy

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

The idea behind Bank Rakyat and Crew Energy 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.