Correlation Between RHB Bank and Hartalega Holdings
Can any of the company-specific risk be diversified away by investing in both RHB Bank and Hartalega Holdings 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 Hartalega Holdings 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 Hartalega Holdings Bhd, you can compare the effects of market volatilities on RHB Bank and Hartalega Holdings 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 Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and Hartalega Holdings.
Diversification Opportunities for RHB Bank and Hartalega Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RHB and Hartalega is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega Holdings 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 Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of RHB Bank i.e., RHB Bank and Hartalega Holdings go up and down completely randomly.
Pair Corralation between RHB Bank and Hartalega Holdings
Assuming the 90 days trading horizon RHB Bank is expected to generate 6.6 times less return on investment than Hartalega Holdings. But when comparing it to its historical volatility, RHB Bank Bhd is 4.66 times less risky than Hartalega Holdings. It trades about 0.14 of its potential returns per unit of risk. Hartalega Holdings Bhd is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 241.00 in Hartalega Holdings Bhd on September 12, 2024 and sell it today you would earn a total of 150.00 from holding Hartalega Holdings Bhd or generate 62.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RHB Bank Bhd vs. Hartalega Holdings Bhd
Performance |
| Timeline |
| RHB Bank Bhd |
| Hartalega Holdings Bhd |
RHB Bank and Hartalega Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RHB Bank and Hartalega Holdings
The main advantage of trading using opposite RHB Bank and Hartalega Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, Hartalega Holdings 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 Hartalega Holdings will offset losses from the drop in Hartalega Holdings' long position.| RHB Bank vs. CSC Steel Holdings | RHB Bank vs. Sungei Bagan Rubber | RHB Bank vs. Sunway Construction Group | RHB Bank vs. PMB Technology Bhd |
| Hartalega Holdings vs. FARM FRESH BERHAD | Hartalega Holdings vs. Mercury Industries Bhd | Hartalega Holdings vs. Central Industrial Corp | Hartalega Holdings vs. Press Metal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |