Correlation Between OSK Holdings and RHB Bank
Can any of the company-specific risk be diversified away by investing in both OSK Holdings and RHB Bank 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 OSK Holdings and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSK Holdings Bhd and RHB Bank Bhd, you can compare the effects of market volatilities on OSK Holdings and RHB Bank 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 OSK Holdings with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSK Holdings and RHB Bank.
Diversification Opportunities for OSK Holdings and RHB Bank
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OSK and RHB is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding OSK Holdings Bhd and RHB Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHB Bank Bhd and OSK Holdings 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 OSK Holdings Bhd are associated (or correlated) with RHB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHB Bank Bhd has no effect on the direction of OSK Holdings i.e., OSK Holdings and RHB Bank go up and down completely randomly.
Pair Corralation between OSK Holdings and RHB Bank
Assuming the 90 days trading horizon OSK Holdings is expected to generate 1.02 times less return on investment than RHB Bank. In addition to that, OSK Holdings is 1.67 times more volatile than RHB Bank Bhd. It trades about 0.09 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.15 per unit of volatility. If you would invest 537.00 in RHB Bank Bhd on September 25, 2024 and sell it today you would earn a total of 99.00 from holding RHB Bank Bhd or generate 18.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
OSK Holdings Bhd vs. RHB Bank Bhd
Performance |
Timeline |
OSK Holdings Bhd |
RHB Bank Bhd |
OSK Holdings and RHB Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OSK Holdings and RHB Bank
The main advantage of trading using opposite OSK Holdings and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSK Holdings position performs unexpectedly, RHB Bank 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 RHB Bank will offset losses from the drop in RHB Bank's long position.OSK Holdings vs. Asian Pac Holdings | OSK Holdings vs. RHB Bank Bhd | OSK Holdings vs. ECS ICT Bhd | OSK Holdings vs. Silver Ridge Holdings |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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