Correlation Between RHB Bank and Apollo Food
Can any of the company-specific risk be diversified away by investing in both RHB Bank and Apollo Food 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 Apollo Food 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 Apollo Food Holdings, you can compare the effects of market volatilities on RHB Bank and Apollo Food 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 Apollo Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of RHB Bank and Apollo Food.
Diversification Opportunities for RHB Bank and Apollo Food
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RHB and Apollo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding RHB Bank Bhd and Apollo Food Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Food Holdings 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 Apollo Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Food Holdings has no effect on the direction of RHB Bank i.e., RHB Bank and Apollo Food go up and down completely randomly.
Pair Corralation between RHB Bank and Apollo Food
Assuming the 90 days trading horizon RHB Bank is expected to generate 2.79 times less return on investment than Apollo Food. But when comparing it to its historical volatility, RHB Bank Bhd is 2.74 times less risky than Apollo Food. It trades about 0.08 of its potential returns per unit of risk. Apollo Food Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 338.00 in Apollo Food Holdings on August 28, 2024 and sell it today you would earn a total of 310.00 from holding Apollo Food Holdings or generate 91.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
RHB Bank Bhd vs. Apollo Food Holdings
Performance |
| Timeline |
| RHB Bank Bhd |
| Apollo Food Holdings |
RHB Bank and Apollo Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RHB Bank and Apollo Food
The main advantage of trading using opposite RHB Bank and Apollo Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RHB Bank position performs unexpectedly, Apollo Food 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 Apollo Food will offset losses from the drop in Apollo Food's long position.| RHB Bank vs. Sunway Construction Group | RHB Bank vs. Binasat Communications Bhd | RHB Bank vs. Sports Toto Berhad | RHB Bank vs. Diversified Gateway Solutions |
| Apollo Food vs. Duopharma Biotech Bhd | Apollo Food vs. Farm Price Holdings | Apollo Food vs. PMB Technology Bhd | Apollo Food vs. Kawan Food 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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