Correlation Between OFFICE DEPOT and BANK RAKYAT

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

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

Diversification Opportunities for OFFICE DEPOT and BANK RAKYAT

0.0

Correlation Coefficient

OFFICE DEPOT  BANK RAKYAT

Pay attention - limited upside

The 3 months correlation between OFFICE and BANK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OFFICE DEPOT 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 OFFICE DEPOT 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 OFFICE DEPOT 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 OFFICE DEPOT i.e., OFFICE DEPOT and BANK RAKYAT go up and down completely randomly.

Pair Corralation between OFFICE DEPOT and BANK RAKYAT

If you would invest  1,920  in OFFICE DEPOT on October 8, 2024 and sell it today you would earn a total of  0.00  from holding OFFICE DEPOT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

OFFICE DEPOT  vs.  BANK RAKYAT IND

OFFICE DEPOT

Risk-Adjusted Performance

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Very Weak

Over the last 90 days OFFICE DEPOT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, OFFICE DEPOT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with OFFICE DEPOT and BANK RAKYAT

The main advantage of trading using opposite OFFICE DEPOT and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFFICE DEPOT 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 OFFICE DEPOT 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.