Correlation Between Bank Rakyat and Honey Badger

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

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

Diversification Opportunities for Bank Rakyat and Honey Badger

0.14

Correlation Coefficient

Bank Rakyat  Honey Badger

Average diversification

The 3 months correlation between Bank and Honey is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Honey Badger Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honey Badger Silver 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 Honey Badger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honey Badger Silver has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Honey Badger go up and down completely randomly.

Pair Corralation between Bank Rakyat and Honey Badger

Assuming the 90 days horizon Bank Rakyat is expected to generate 0.46 times more return on investment than Honey Badger. However, Bank Rakyat is 2.19 times less risky than Honey Badger. It trades about -0.4 of its potential returns per unit of risk. Honey Badger Silver is currently generating about -0.19 per unit of risk. If you would invest  1,299  in Bank Rakyat on December 2, 2024 and sell it today you would lose (238.00) from holding Bank Rakyat or give up 18.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Bank Rakyat  vs.  Honey Badger Silver

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 weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Honey Badger Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Honey Badger Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bank Rakyat and Honey Badger

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

The idea behind Bank Rakyat and Honey Badger Silver 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.