Correlation Between YTL Hospitality and RHB Bank
Can any of the company-specific risk be diversified away by investing in both YTL Hospitality 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 YTL Hospitality and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Hospitality REIT and RHB Bank Bhd, you can compare the effects of market volatilities on YTL Hospitality 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 YTL Hospitality with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTL Hospitality and RHB Bank.
Diversification Opportunities for YTL Hospitality and RHB Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between YTL and RHB is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding YTL Hospitality REIT 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 YTL Hospitality 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 YTL Hospitality REIT 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 YTL Hospitality i.e., YTL Hospitality and RHB Bank go up and down completely randomly.
Pair Corralation between YTL Hospitality and RHB Bank
Assuming the 90 days trading horizon YTL Hospitality REIT is expected to under-perform the RHB Bank. But the stock apears to be less risky and, when comparing its historical volatility, YTL Hospitality REIT is 1.16 times less risky than RHB Bank. The stock trades about -0.11 of its potential returns per unit of risk. The RHB Bank Bhd is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 640.00 in RHB Bank Bhd on October 20, 2024 and sell it today you would lose (5.00) from holding RHB Bank Bhd or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Hospitality REIT vs. RHB Bank Bhd
Performance |
| Timeline |
| YTL Hospitality REIT |
| RHB Bank Bhd |
YTL Hospitality and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTL Hospitality and RHB Bank
The main advantage of trading using opposite YTL Hospitality and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTL Hospitality 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.| YTL Hospitality vs. Aeon Credit Service | YTL Hospitality vs. Malaysia Steel Works | YTL Hospitality vs. Riverview Rubber Estates | YTL Hospitality vs. Leader Steel Holdings |
| RHB Bank vs. Malayan Banking Bhd | RHB Bank vs. Public Bank Bhd | RHB Bank vs. Hong Leong Bank | RHB Bank vs. Resintech 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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