Correlation Between BANK RAKYAT and GLATFELTER

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

Diversification Opportunities for BANK RAKYAT and GLATFELTER

0.65

Correlation Coefficient

BANK RAKYAT  GLATFELTER

Poor diversification

The 3 months correlation between BANK and GLATFELTER is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and GLATFELTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLATFELTER 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 GLATFELTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLATFELTER has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and GLATFELTER go up and down completely randomly.

Pair Corralation between BANK RAKYAT and GLATFELTER

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the GLATFELTER. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.43 times less risky than GLATFELTER. The stock trades about -0.1 of its potential returns per unit of risk. The GLATFELTER is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,028  in GLATFELTER on October 6, 2024 and sell it today you would lose (288.00) from holding GLATFELTER or give up 14.2% of portfolio value over 90 days.

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

BANK RAKYAT IND  vs.  GLATFELTER

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.

GLATFELTER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLATFELTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BANK RAKYAT and GLATFELTER

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

The idea behind BANK RAKYAT IND and GLATFELTER 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.