Correlation Between BANK RAKYAT and SLR Investment

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

Diversification Opportunities for BANK RAKYAT and SLR Investment

0.07

Correlation Coefficient

BANK RAKYAT  SLR Investment

Significant diversification

The 3 months correlation between BANK and SLR is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BANK RAKYAT IND and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment Corp 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of BANK RAKYAT i.e., BANK RAKYAT and SLR Investment go up and down completely randomly.

Pair Corralation between BANK RAKYAT and SLR Investment

Assuming the 90 days trading horizon BANK RAKYAT IND is expected to under-perform the SLR Investment. In addition to that, BANK RAKYAT is 1.48 times more volatile than SLR Investment Corp. It trades about -0.13 of its total potential returns per unit of risk. SLR Investment Corp is currently generating about 0.06 per unit of volatility. If you would invest  1,520  in SLR Investment Corp on December 28, 2024 and sell it today you would earn a total of  60.00  from holding SLR Investment Corp or generate 3.95% 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.  SLR Investment Corp

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 fragile 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.

SLR Investment Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SLR Investment is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK RAKYAT and SLR Investment

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

The idea behind BANK RAKYAT IND and SLR Investment Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..