Correlation Between BANK RAKYAT and CALTAGIRONE EDITORE

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

Diversification Opportunities for BANK RAKYAT and CALTAGIRONE EDITORE

0.15

Correlation Coefficient

BANK RAKYAT  CALTAGIRONE EDITORE

Average diversification

The 3 months correlation between BANK and CALTAGIRONE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and CALTAGIRONE EDITORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CALTAGIRONE EDITORE has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and CALTAGIRONE EDITORE go up and down completely randomly.

Pair Corralation between BANK RAKYAT and CALTAGIRONE EDITORE

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the CALTAGIRONE EDITORE. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 2.16 times less risky than CALTAGIRONE EDITORE. The stock trades about -0.13 of its potential returns per unit of risk. The CALTAGIRONE EDITORE is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  130.00  in CALTAGIRONE EDITORE on December 25, 2024 and sell it today you would earn a total of  20.00  from holding CALTAGIRONE EDITORE or generate 15.38% return on investment over 90 days.

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

BANK RAKYAT IND  vs.  CALTAGIRONE EDITORE

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CALTAGIRONE EDITORE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CALTAGIRONE EDITORE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CALTAGIRONE EDITORE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BANK RAKYAT and CALTAGIRONE EDITORE

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

The idea behind BANK RAKYAT IND and CALTAGIRONE EDITORE 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 Global Correlations module to find global opportunities by holding instruments from different markets.