Correlation Between Susquehanna Community and Bank Rakyat

Can any of the company-specific risk be diversified away by investing in both Susquehanna Community 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 Susquehanna Community and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Susquehanna Community Financial and Bank Rakyat, you can compare the effects of market volatilities on Susquehanna Community 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 Susquehanna Community with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Susquehanna Community and Bank Rakyat.

Diversification Opportunities for Susquehanna Community and Bank Rakyat

-0.67

Correlation Coefficient

Susquehanna Community  Bank Rakyat

Excellent diversification

The 3 months correlation between Susquehanna and Bank is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Susquehanna Community Financia and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat and Susquehanna Community 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 Susquehanna Community Financial 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 has no effect on the direction of Susquehanna Community i.e., Susquehanna Community and Bank Rakyat go up and down completely randomly.

Pair Corralation between Susquehanna Community and Bank Rakyat

Given the investment horizon of 90 days Susquehanna Community Financial is expected to generate 0.74 times more return on investment than Bank Rakyat. However, Susquehanna Community Financial is 1.35 times less risky than Bank Rakyat. It trades about 0.15 of its potential returns per unit of risk. Bank Rakyat is currently generating about -0.42 per unit of risk. If you would invest  1,108  in Susquehanna Community Financial on February 4, 2024 and sell it today you would earn a total of  57.00  from holding Susquehanna Community Financial or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Susquehanna Community Financia  vs.  Bank Rakyat

Susquehanna Community

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Susquehanna Community Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Susquehanna Community may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Susquehanna Community and Bank Rakyat

The main advantage of trading using opposite Susquehanna Community and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Susquehanna Community 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 Susquehanna Community Financial and Bank Rakyat 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..