Correlation Between Bank Rakyat and Timberline Resources

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

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

Diversification Opportunities for Bank Rakyat and Timberline Resources

0.0

Correlation Coefficient

Bank Rakyat  Timberline Resources

Pay attention - limited upside

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

Pair Corralation between Bank Rakyat and Timberline Resources

If you would invest (100.00) in Timberline Resources on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Timberline Resources or generate -100.0% return on investment over 90 days.

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

Bank Rakyat  vs.  Timberline Resources

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.

Timberline Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Timberline Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Timberline Resources is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bank Rakyat and Timberline Resources

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

The idea behind Bank Rakyat and Timberline Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.