Correlation Between Bank Rakyat and Regen BioPharma

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

By analyzing existing cross correlation between Bank Rakyat and Regen BioPharma, you can compare the effects of market volatilities on Bank Rakyat and Regen BioPharma 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 Regen BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Regen BioPharma.

Diversification Opportunities for Bank Rakyat and Regen BioPharma

-0.74

Correlation Coefficient

Bank Rakyat  Regen BioPharma

Pay attention - limited upside

The 3 months correlation between Bank and Regen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen BioPharma 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 Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Regen BioPharma go up and down completely randomly.

Pair Corralation between Bank Rakyat and Regen BioPharma

Assuming the 90 days horizon Bank Rakyat is expected to generate 7.02 times less return on investment than Regen BioPharma. But when comparing it to its historical volatility, Bank Rakyat is 21.3 times less risky than Regen BioPharma. It trades about 0.12 of its potential returns per unit of risk. Regen BioPharma is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Regen BioPharma on June 30, 2024 and sell it today you would lose (13.00) from holding Regen BioPharma or give up 39.39% of portfolio value over 90 days.

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

Bank Rakyat  vs.  Regen BioPharma

Bank Rakyat

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Rakyat are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Bank Rakyat showed solid returns over the last few months and may actually be approaching a breakup point.

Regen BioPharma

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental drivers, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank Rakyat and Regen BioPharma

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

The idea behind Bank Rakyat and Regen BioPharma 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.