Correlation Between BANK RAKYAT and Sun Art
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and Sun Art 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 Sun Art 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 Sun Art Retail, you can compare the effects of market volatilities on BANK RAKYAT and Sun Art 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 Sun Art. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and Sun Art.
Diversification Opportunities for BANK RAKYAT and Sun Art
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Sun is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and Sun Art Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Art Retail 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 Sun Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Art Retail has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and Sun Art go up and down completely randomly.
Pair Corralation between BANK RAKYAT and Sun Art
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the Sun Art. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 2.61 times less risky than Sun Art. The stock trades about -0.02 of its potential returns per unit of risk. The Sun Art Retail is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Sun Art Retail on September 23, 2024 and sell it today you would earn a total of 12.00 from holding Sun Art Retail or generate 63.16% 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. Sun Art Retail
Performance |
Timeline |
BANK RAKYAT IND |
Sun Art Retail |
BANK RAKYAT and Sun Art Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and Sun Art
The main advantage of trading using opposite BANK RAKYAT and Sun Art positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, Sun Art 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 Sun Art will offset losses from the drop in Sun Art'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 |
Sun Art vs. Aeon Co | Sun Art vs. SHOPRITE HDGS ADR | Sun Art vs. Shoprite Holdings Limited | Sun Art vs. Dillards |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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