Correlation Between Bank Rakyat and Comstock Metals
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Comstock Metals 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 Comstock Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Comstock Metals, you can compare the effects of market volatilities on Bank Rakyat and Comstock Metals 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 Comstock Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Comstock Metals.
Diversification Opportunities for Bank Rakyat and Comstock Metals
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Comstock is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Comstock Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Metals 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 are associated (or correlated) with Comstock Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Metals has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Comstock Metals go up and down completely randomly.
Pair Corralation between Bank Rakyat and Comstock Metals
Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Comstock Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.05 times less risky than Comstock Metals. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Comstock Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.87 in Comstock Metals on February 18, 2024 and sell it today you would earn a total of 0.13 from holding Comstock Metals or generate 14.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank Rakyat vs. Comstock Metals
Performance |
Timeline |
Bank Rakyat |
Comstock Metals |
Bank Rakyat and Comstock Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank Rakyat and Comstock Metals
The main advantage of trading using opposite Bank Rakyat and Comstock Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Comstock Metals 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 Comstock Metals will offset losses from the drop in Comstock Metals' long position.Bank Rakyat vs. Associated Banc Corp | Bank Rakyat vs. KeyCorp | Bank Rakyat vs. KeyCorp | Bank Rakyat vs. Regions Financial |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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