Correlation Between BANK RAKYAT and YAMAHA MOTOR
Can any of the company-specific risk be diversified away by investing in both BANK RAKYAT and YAMAHA MOTOR 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 YAMAHA MOTOR 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 YAMAHA MOTOR, you can compare the effects of market volatilities on BANK RAKYAT and YAMAHA MOTOR 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 YAMAHA MOTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK RAKYAT and YAMAHA MOTOR.
Diversification Opportunities for BANK RAKYAT and YAMAHA MOTOR
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BANK and YAMAHA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and YAMAHA MOTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YAMAHA MOTOR 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 YAMAHA MOTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YAMAHA MOTOR has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and YAMAHA MOTOR go up and down completely randomly.
Pair Corralation between BANK RAKYAT and YAMAHA MOTOR
Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the YAMAHA MOTOR. But the stock apears to be less risky and, when comparing its historical volatility, BANK RAKYAT IND is 1.09 times less risky than YAMAHA MOTOR. The stock trades about -0.13 of its potential returns per unit of risk. The YAMAHA MOTOR is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 858.00 in YAMAHA MOTOR on December 22, 2024 and sell it today you would lose (107.00) from holding YAMAHA MOTOR or give up 12.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BANK RAKYAT IND vs. YAMAHA MOTOR
Performance |
Timeline |
BANK RAKYAT IND |
YAMAHA MOTOR |
BANK RAKYAT and YAMAHA MOTOR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BANK RAKYAT and YAMAHA MOTOR
The main advantage of trading using opposite BANK RAKYAT and YAMAHA MOTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK RAKYAT position performs unexpectedly, YAMAHA MOTOR 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 YAMAHA MOTOR will offset losses from the drop in YAMAHA MOTOR's long position.BANK RAKYAT vs. ACCSYS TECHPLC EO | BANK RAKYAT vs. VELA TECHNOLPLC LS 0001 | BANK RAKYAT vs. GLG LIFE TECH | BANK RAKYAT vs. Addtech AB |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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