Correlation Between RHB Bank and Aeon Credit
Can any of the company-specific risk be diversified away by investing in both RHB Bank and Aeon Credit 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 Aeon Credit 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 Aeon Credit Service, you can compare the effects of market volatilities on RHB Bank and Aeon Credit 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 Aeon Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and Aeon Credit.
Diversification Opportunities for RHB Bank and Aeon Credit
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RHB and Aeon is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and Aeon Credit Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeon Credit Service 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 Aeon Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeon Credit Service has no effect on the direction of RHB Bank i.e., RHB Bank and Aeon Credit go up and down completely randomly.
Pair Corralation between RHB Bank and Aeon Credit
Assuming the 90 days trading horizon RHB Bank Bhd is expected to generate 0.67 times more return on investment than Aeon Credit. However, RHB Bank Bhd is 1.49 times less risky than Aeon Credit. It trades about 0.22 of its potential returns per unit of risk. Aeon Credit Service is currently generating about -0.02 per unit of risk. If you would invest 538.00 in RHB Bank Bhd on September 2, 2024 and sell it today you would earn a total of 138.00 from holding RHB Bank Bhd or generate 25.65% 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. Aeon Credit Service
Performance |
| Timeline |
| RHB Bank Bhd |
| Aeon Credit Service |
RHB Bank and Aeon Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RHB Bank and Aeon Credit
The main advantage of trading using opposite RHB Bank and Aeon Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, Aeon Credit 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 Aeon Credit will offset losses from the drop in Aeon Credit's long position.| RHB Bank vs. TAS Offshore Bhd | RHB Bank vs. Greatech Technology Bhd | RHB Bank vs. Choo Bee Metal | RHB Bank vs. Cloudpoint Technology Berhad |
| Aeon Credit vs. ES Ceramics Technology | Aeon Credit vs. Computer Forms Bhd | Aeon Credit vs. K One Technology Bhd | Aeon Credit vs. Oriental Food Industries |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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