Correlation Between Bank Rakyat and NR Old

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

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

Diversification Opportunities for Bank Rakyat and NR Old

-0.52

Correlation Coefficient

Bank Rakyat  NR Old

Excellent diversification

The 3 months correlation between Bank and NR Old is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and NR Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NR Old 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 NR Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NR Old has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and NR Old go up and down completely randomly.

Pair Corralation between Bank Rakyat and NR Old

If you would invest  724.00  in NR Old on October 23, 2024 and sell it today you would earn a total of  0.00  from holding NR Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

Bank Rakyat  vs.  NR Old

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

NR Old

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days NR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively abnormal basic indicators, NR Old may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bank Rakyat and NR Old

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

The idea behind Bank Rakyat and NR Old 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.