Correlation Between Bank Rakyat and Thunder Bridge

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

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

Diversification Opportunities for Bank Rakyat and Thunder Bridge

0.0

Correlation Coefficient

Bank Rakyat  Thunder Bridge

Pay attention - limited upside

The 3 months correlation between Bank and Thunder is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge Capital 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 Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Thunder Bridge go up and down completely randomly.

Pair Corralation between Bank Rakyat and Thunder Bridge

If you would invest  1,222  in Bank Rakyat on December 27, 2024 and sell it today you would lose (18.00) from holding Bank Rakyat or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bank Rakyat  vs.  Thunder Bridge Capital

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 fairly strong forward-looking signals, Bank Rakyat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thunder Bridge Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunder Bridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Thunder Bridge is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bank Rakyat and Thunder Bridge

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

The idea behind Bank Rakyat and Thunder Bridge Capital 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.