Correlation Between Bank Rakyat and Edgio

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Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Edgio 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 Edgio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Edgio Inc, you can compare the effects of market volatilities on Bank Rakyat and Edgio 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 Edgio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Edgio.

Diversification Opportunities for Bank Rakyat and Edgio

BankEdgioDiversified AwayBankEdgioDiversified Away100%
0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bank and Edgio is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc 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 Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Edgio go up and down completely randomly.

Pair Corralation between Bank Rakyat and Edgio

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Edgio. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 153.28 times less risky than Edgio. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Edgio Inc is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Edgio Inc on October 27, 2024 and sell it today you would lose (1.00) from holding Edgio Inc or give up 33.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy30.0%
ValuesDaily Returns

Bank Rakyat  vs.  Edgio Inc

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100-80-60-40-20020
JavaScript chart by amCharts 3.21.15BKRKY EGIO
       Timeline  
Bank Rakyat 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan11.51212.51313.51414.51515.5
Edgio Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Edgio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak forward indicators, Edgio displayed solid returns over the last few months and may actually be approaching a breakup point.

Bank Rakyat and Edgio Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.5-2.62-1.74-0.860.00.771.542.313.08 0.020.040.060.08
JavaScript chart by amCharts 3.21.15BKRKY EGIO
       Returns  

Pair Trading with Bank Rakyat and Edgio

The main advantage of trading using opposite Bank Rakyat and Edgio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Edgio 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 Edgio will offset losses from the drop in Edgio's long position.
The idea behind Bank Rakyat and Edgio Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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