Correlation Between Family Dollar and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Family Dollar 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 Family Dollar and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Family Dollar Stores and Bank Rakyat, you can compare the effects of market volatilities on Family Dollar 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 Family Dollar with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Family Dollar and Bank Rakyat.
Diversification Opportunities for Family Dollar and Bank Rakyat
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Family and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Family Dollar Stores and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat and Family Dollar 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 Family Dollar Stores 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 Family Dollar i.e., Family Dollar and Bank Rakyat go up and down completely randomly.
Pair Corralation between Family Dollar and Bank Rakyat
If you would invest (100.00) in Family Dollar Stores on January 17, 2024 and sell it today you would earn a total of 100.00 from holding Family Dollar Stores or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Family Dollar Stores vs. Bank Rakyat
Performance |
| Timeline |
| Family Dollar Stores |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank Rakyat |
Family Dollar and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Family Dollar and Bank Rakyat
The main advantage of trading using opposite Family Dollar and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Family Dollar 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.| Family Dollar vs. Delta Air Lines | Family Dollar vs. NetSol Technologies | Family Dollar vs. Grow Solutions Holdings | Family Dollar vs. FactSet Research Systems |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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