Correlation Between Bank Rakyat and Capcom

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

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

Diversification Opportunities for Bank Rakyat and Capcom

-0.47

Correlation Coefficient

Bank Rakyat  Capcom

Very good diversification

The 3 months correlation between Bank and Capcom is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Capcom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capcom 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 Capcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capcom has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Capcom go up and down completely randomly.

Pair Corralation between Bank Rakyat and Capcom

Assuming the 90 days horizon Bank Rakyat is expected to under-perform the Capcom. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Rakyat is 1.15 times less risky than Capcom. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Capcom Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,718  in Capcom Co on May 6, 2025 and sell it today you would earn a total of  132.00  from holding Capcom Co or generate 4.86% return on investment over 90 days.

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

Bank Rakyat  vs.  Capcom Co

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.

Capcom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Capcom Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Capcom may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bank Rakyat and Capcom

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

The idea behind Bank Rakyat and Capcom Co 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.