Correlation Between Bank Rakyat and Basanite

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

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

Diversification Opportunities for Bank Rakyat and Basanite

-0.44

Correlation Coefficient

Bank Rakyat  Basanite

Very good diversification

The 3 months correlation between Bank and Basanite is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Basanite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basanite 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 Basanite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basanite has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Basanite go up and down completely randomly.

Pair Corralation between Bank Rakyat and Basanite

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Basanite. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 4.03 times less risky than Basanite. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Basanite is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Basanite on May 4, 2025 and sell it today you would lose (0.60) from holding Basanite or give up 17.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Bank Rakyat  vs.  Basanite

Bank Rakyat

Risk-Adjusted Performance

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 fairly strong forward-looking signals, Bank Rakyat is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Basanite

Risk-Adjusted Performance

Very Weak

Over the last 90 days Basanite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Basanite is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bank Rakyat and Basanite

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

The idea behind Bank Rakyat and Basanite 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.