Correlation Between BANK RAKYAT and DICKER DATA

Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and DICKER DATA 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 DICKER DATA 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 DICKER DATA LTD, you can compare the effects of market volatilities on BANK RAKYAT and DICKER DATA 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 DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and DICKER DATA.

Diversification Opportunities for BANK RAKYAT and DICKER DATA

0.09

Correlation Coefficient

BANK RAKYAT  DICKER DATA

Significant diversification

The 3 months correlation between BANK and DICKER is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA LTD 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 DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and DICKER DATA go up and down completely randomly.

Pair Corralation between BANK RAKYAT and DICKER DATA

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to generate 1.83 times more return on investment than DICKER DATA. However, BANK RAKYAT is 1.83 times more volatile than DICKER DATA LTD. It trades about 0.01 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about 0.01 per unit of risk. If you would invest  22.00  in BANK RAKYAT IND on December 29, 2024 and sell it today you would lose (1.00) from holding BANK RAKYAT IND or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BANK RAKYAT IND  vs.  DICKER DATA LTD

BANK RAKYAT IND

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, BANK RAKYAT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

DICKER DATA LTD

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DICKER DATA LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, DICKER DATA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK RAKYAT and DICKER DATA

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

The idea behind BANK RAKYAT IND and DICKER DATA LTD 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.