Correlation Between Bank Rakyat and JRSIS Health

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

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

Diversification Opportunities for Bank Rakyat and JRSIS Health

0.79

Correlation Coefficient

Bank Rakyat  JRSIS Health

Poor diversification

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

Pair Corralation between Bank Rakyat and JRSIS Health

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the JRSIS Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 6.91 times less risky than JRSIS Health. The pink sheet trades about -0.08 of its potential returns per unit of risk. The JRSIS Health Care is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  40.00  in JRSIS Health Care on September 21, 2024 and sell it today you would lose (25.00) from holding JRSIS Health Care or give up 62.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.07%
Values	Daily Returns

Bank Rakyat  vs.  JRSIS Health Care

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

JRSIS Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JRSIS Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bank Rakyat and JRSIS Health

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

The idea behind Bank Rakyat and JRSIS Health Care 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.