Correlation Between BANK RAKYAT and OSRAM LICHT
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and OSRAM LICHT 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 OSRAM LICHT 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 OSRAM LICHT N, you can compare the effects of market volatilities on BANK RAKYAT and OSRAM LICHT 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 OSRAM LICHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and OSRAM LICHT.
Diversification Opportunities for BANK RAKYAT and OSRAM LICHT
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and OSRAM is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and OSRAM LICHT N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSRAM LICHT N 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 OSRAM LICHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSRAM LICHT N has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and OSRAM LICHT go up and down completely randomly.
Pair Corralation between BANK RAKYAT and OSRAM LICHT
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the OSRAM LICHT. In addition to that, BANK RAKYAT is 5.64 times more volatile than OSRAM LICHT N. It trades about -0.21 of its total potential returns per unit of risk. OSRAM LICHT N is currently generating about 0.12 per unit of volatility. If you would invest 5,140 in OSRAM LICHT N on September 23, 2024 and sell it today you would earn a total of 40.00 from holding OSRAM LICHT N or generate 0.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BANK RAKYAT IND vs. OSRAM LICHT N
Performance |
Timeline |
BANK RAKYAT IND |
OSRAM LICHT N |
BANK RAKYAT and OSRAM LICHT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and OSRAM LICHT
The main advantage of trading using opposite BANK RAKYAT and OSRAM LICHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, OSRAM LICHT 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 OSRAM LICHT will offset losses from the drop in OSRAM LICHT's long position.BANK RAKYAT vs. Cogent Communications Holdings | BANK RAKYAT vs. Zoom Video Communications | BANK RAKYAT vs. VIVA WINE GROUP | BANK RAKYAT vs. UNIVERSAL MUSIC GROUP |
OSRAM LICHT vs. Delta Electronics Public | OSRAM LICHT vs. YASKAWA ELEC UNSP | OSRAM LICHT vs. Plug Power | OSRAM LICHT vs. VERTIV HOLCL A |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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