Correlation Between Bank Rakyat and Margo Caribe

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Margo Caribe 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 Margo Caribe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Margo Caribe, you can compare the effects of market volatilities on Bank Rakyat and Margo Caribe 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 Margo Caribe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Margo Caribe.

Diversification Opportunities for Bank Rakyat and Margo Caribe

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bank and Margo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Margo Caribe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Margo Caribe 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 Margo Caribe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Margo Caribe has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Margo Caribe go up and down completely randomly.

Pair Corralation between Bank Rakyat and Margo Caribe

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Margo Caribe. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 54.99 times less risky than Margo Caribe. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Margo Caribe is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  355.00  in Margo Caribe on October 6, 2024 and sell it today you would earn a total of  110.00  from holding Margo Caribe or generate 30.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bank Rakyat  vs.  Margo Caribe

 Performance 
       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.
Margo Caribe 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Margo Caribe are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Margo Caribe displayed solid returns over the last few months and may actually be approaching a breakup point.

Bank Rakyat and Margo Caribe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Rakyat and Margo Caribe

The main advantage of trading using opposite Bank Rakyat and Margo Caribe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Margo Caribe 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 Margo Caribe will offset losses from the drop in Margo Caribe's long position.
The idea behind Bank Rakyat and Margo Caribe 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.
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments