Correlation Between Bank Rakyat and JD Bancshares
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and JD Bancshares 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 JD Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and JD Bancshares, you can compare the effects of market volatilities on Bank Rakyat and JD Bancshares 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 JD Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and JD Bancshares.
Diversification Opportunities for Bank Rakyat and JD Bancshares
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and JDVB is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and JD Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Bancshares 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 JD Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Bancshares has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and JD Bancshares go up and down completely randomly.
Pair Corralation between Bank Rakyat and JD Bancshares
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the JD Bancshares. In addition to that, Bank Rakyat is 1.81 times more volatile than JD Bancshares. It trades about -0.19 of its total potential returns per unit of risk. JD Bancshares is currently generating about 0.2 per unit of volatility. If you would invest 2,350 in JD Bancshares on September 19, 2024 and sell it today you would earn a total of 99.00 from holding JD Bancshares or generate 4.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Rakyat vs. JD Bancshares
Performance |
Timeline |
Bank Rakyat |
JD Bancshares |
Bank Rakyat and JD Bancshares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Rakyat and JD Bancshares
The main advantage of trading using opposite Bank Rakyat and JD Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, JD Bancshares 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 JD Bancshares will offset losses from the drop in JD Bancshares' long position.Bank Rakyat vs. Morningstar Unconstrained Allocation | Bank Rakyat vs. Bondbloxx ETF Trust | Bank Rakyat vs. Spring Valley Acquisition | Bank Rakyat vs. Bondbloxx ETF Trust |
JD Bancshares vs. HUMANA INC | JD Bancshares vs. Barloworld Ltd ADR | JD Bancshares vs. Morningstar Unconstrained Allocation | JD Bancshares vs. Thrivent High Yield |
Check out your portfolio center.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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