Correlation Between RHB Bank and Mr D
Can any of the company-specific risk be diversified away by investing in both RHB Bank and Mr D 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 RHB Bank and Mr D into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RHB Bank Bhd and Mr D I, you can compare the effects of market volatilities on RHB Bank and Mr D 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 RHB Bank with a short position of Mr D. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and Mr D.
Diversification Opportunities for RHB Bank and Mr D
Excellent diversification
The 3 months correlation between RHB and 5296 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and Mr D I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr D I and RHB Bank 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 RHB Bank Bhd are associated (or correlated) with Mr D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr D I has no effect on the direction of RHB Bank i.e., RHB Bank and Mr D go up and down completely randomly.
Pair Corralation between RHB Bank and Mr D
Assuming the 90 days trading horizon RHB Bank Bhd is expected to generate 0.37 times more return on investment than Mr D. However, RHB Bank Bhd is 2.69 times less risky than Mr D. It trades about 0.07 of its potential returns per unit of risk. Mr D I is currently generating about 0.0 per unit of risk. If you would invest 511.00 in RHB Bank Bhd on September 26, 2024 and sell it today you would earn a total of 131.00 from holding RHB Bank Bhd or generate 25.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RHB Bank Bhd vs. Mr D I
Performance |
Timeline |
RHB Bank Bhd |
Mr D I |
RHB Bank and Mr D Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RHB Bank and Mr D
The main advantage of trading using opposite RHB Bank and Mr D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, Mr D 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 Mr D will offset losses from the drop in Mr D's long position.RHB Bank vs. Malayan Banking Bhd | RHB Bank vs. Public Bank Bhd | RHB Bank vs. Hong Leong Bank | RHB Bank vs. Genetec Technology Bhd |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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