Correlation Between Daya Materials and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Daya Materials 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 Daya Materials and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daya Materials Bhd and RHB Bank Bhd, you can compare the effects of market volatilities on Daya Materials 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 Daya Materials with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and RHB Bank.
Diversification Opportunities for Daya Materials and RHB Bank
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daya and RHB is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials 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 Daya Materials 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 Daya Materials 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 Daya Materials i.e., Daya Materials and RHB Bank go up and down completely randomly.
Pair Corralation between Daya Materials and RHB Bank
Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the RHB Bank. In addition to that, Daya Materials is 8.5 times more volatile than RHB Bank Bhd. It trades about -0.05 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about -0.02 per unit of volatility. If you would invest 645.00 in RHB Bank Bhd on November 3, 2024 and sell it today you would lose (2.00) from holding RHB Bank Bhd or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daya Materials Bhd vs. RHB Bank Bhd
Performance |
| Timeline |
| Daya Materials Bhd |
| RHB Bank Bhd |
Daya Materials and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and RHB Bank
The main advantage of trading using opposite Daya Materials and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials 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.| Daya Materials vs. Kawan Food Bhd | Daya Materials vs. Lotte Chemical Titan | Daya Materials vs. Carlsberg Brewery Malaysia | Daya Materials vs. TAS Offshore Bhd |
| RHB Bank vs. Computer Forms Bhd | RHB Bank vs. Uchi Technologies Bhd | RHB Bank vs. Malaysia Steel Works | RHB Bank vs. Sunway Construction Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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