Correlation Between RHB Bank and LPI Capital
Can any of the company-specific risk be diversified away by investing in both RHB Bank and LPI Capital 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 LPI Capital 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 LPI Capital Bhd, you can compare the effects of market volatilities on RHB Bank and LPI Capital 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 LPI Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and LPI Capital.
Diversification Opportunities for RHB Bank and LPI Capital
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RHB and LPI is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and LPI Capital Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPI Capital Bhd 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 LPI Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPI Capital Bhd has no effect on the direction of RHB Bank i.e., RHB Bank and LPI Capital go up and down completely randomly.
Pair Corralation between RHB Bank and LPI Capital
Assuming the 90 days trading horizon RHB Bank Bhd is expected to generate 1.06 times more return on investment than LPI Capital. However, RHB Bank is 1.06 times more volatile than LPI Capital Bhd. It trades about 0.07 of its potential returns per unit of risk. LPI Capital Bhd is currently generating about -0.06 per unit of risk. If you would invest 618.00 in RHB Bank Bhd on September 26, 2024 and sell it today you would earn a total of 24.00 from holding RHB Bank Bhd or generate 3.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RHB Bank Bhd vs. LPI Capital Bhd
Performance |
Timeline |
RHB Bank Bhd |
LPI Capital Bhd |
RHB Bank and LPI Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RHB Bank and LPI Capital
The main advantage of trading using opposite RHB Bank and LPI Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, LPI Capital 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 LPI Capital will offset losses from the drop in LPI Capital'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 |
LPI Capital vs. Cengild Medical Berhad | LPI Capital vs. RHB Bank Bhd | LPI Capital vs. Sports Toto Berhad | LPI Capital vs. Malayan Banking Bhd |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Bonds Directory Find actively traded corporate debentures issued by US companies |