Correlation Between Q2M Managementberatu and BANK RAKYAT

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and BANK RAKYAT IND, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and BANK RAKYAT.

Diversification Opportunities for Q2M Managementberatu and BANK RAKYAT

-0.08

Correlation Coefficient

Q2M Managementberatu  BANK RAKYAT

Good diversification

The 3 months correlation between Q2M and BANK is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG 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 Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and BANK RAKYAT go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and BANK RAKYAT

Assuming the 90 days trading horizon Q2M Managementberatung AG is expected to generate 0.16 times more return on investment than BANK RAKYAT. However, Q2M Managementberatung AG is 6.29 times less risky than BANK RAKYAT. It trades about 0.0 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about -0.02 per unit of risk. If you would invest  100.00  in Q2M Managementberatung AG on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Q2M Managementberatung AG or generate 0.0% return on investment over 90 days.

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

Q2M Managementberatung AG  vs.  BANK RAKYAT IND

Q2M Managementberatung

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Q2M Managementberatu is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 fragile 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 Q2M Managementberatu and BANK RAKYAT

The main advantage of trading using opposite Q2M Managementberatu and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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 Q2M Managementberatung AG 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.