Correlation Between BANK RAKYAT and CITIC SECURITIES-H-

Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and CITIC SECURITIES-H- 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 CITIC SECURITIES-H- into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BANK RAKYAT IND and CITIC SECURITIES H , you can compare the effects of market volatilities on BANK RAKYAT and CITIC SECURITIES-H- 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 CITIC SECURITIES-H-. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and CITIC SECURITIES-H-.

Diversification Opportunities for BANK RAKYAT and CITIC SECURITIES-H-

-0.56

Correlation Coefficient

BANK RAKYAT  CITIC SECURITIES-H-

Excellent diversification

The 3 months correlation between BANK and CITIC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and CITIC SECURITIES H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC SECURITIES-H- 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 IND are associated (or correlated) with CITIC SECURITIES-H-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC SECURITIES-H- has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and CITIC SECURITIES-H- go up and down completely randomly.

Pair Corralation between BANK RAKYAT and CITIC SECURITIES-H-

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the CITIC SECURITIES-H-. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.61 times less risky than CITIC SECURITIES-H-. The stock trades about 0.0 of its potential returns per unit of risk. The CITIC SECURITIES H is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  80.00  in CITIC SECURITIES H on October 10, 2024 and sell it today you would earn a total of  164.00  from holding CITIC SECURITIES H or generate 205.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BANK RAKYAT IND  vs.  CITIC SECURITIES H

BANK RAKYAT IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK RAKYAT IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CITIC SECURITIES-H-

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC SECURITIES H are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CITIC SECURITIES-H- may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BANK RAKYAT and CITIC SECURITIES-H-

The main advantage of trading using opposite BANK RAKYAT and CITIC SECURITIES-H- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, CITIC SECURITIES-H- 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 CITIC SECURITIES-H- will offset losses from the drop in CITIC SECURITIES-H-'s long position.

The idea behind BANK RAKYAT IND and CITIC SECURITIES H 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.