Correlation Between TSOGO SUN and BANK RAKYAT

Can any of the company-specific risk be diversified away by investing in both TSOGO SUN and BANK RAKYAT 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 TSOGO SUN and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TSOGO SUN GAMING and BANK RAKYAT IND, you can compare the effects of market volatilities on TSOGO SUN and BANK RAKYAT 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 TSOGO SUN with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and BANK RAKYAT.

Diversification Opportunities for TSOGO SUN and BANK RAKYAT

0.49

Correlation Coefficient

TSOGO SUN  BANK RAKYAT

Very weak diversification

The 3 months correlation between TSOGO and BANK is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND and TSOGO SUN 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 TSOGO SUN GAMING are associated (or correlated) with BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of TSOGO SUN i.e., TSOGO SUN and BANK RAKYAT go up and down completely randomly.

Pair Corralation between TSOGO SUN and BANK RAKYAT

Assuming the 90 days horizon TSOGO SUN GAMING is expected to generate 0.84 times more return on investment than BANK RAKYAT. However, TSOGO SUN GAMING is 1.19 times less risky than BANK RAKYAT. It trades about -0.06 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.12 per unit of risk. If you would invest  60.00  in TSOGO SUN GAMING on September 13, 2024 and sell it today you would lose (5.00) from holding TSOGO SUN GAMING or give up 8.33% of portfolio value over 90 days.

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

TSOGO SUN GAMING  vs.  BANK RAKYAT IND

TSOGO SUN GAMING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSOGO SUN GAMING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BANK RAKYAT IND

Risk-Adjusted Performance

0 of 100

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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with TSOGO SUN and BANK RAKYAT

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

The idea behind TSOGO SUN GAMING and BANK RAKYAT IND 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.