Correlation Between Ho Hup and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Ho Hup 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 Ho Hup and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ho Hup Construction and RHB Bank Bhd, you can compare the effects of market volatilities on Ho Hup 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 Ho Hup with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ho Hup and RHB Bank.
Diversification Opportunities for Ho Hup and RHB Bank
Very weak diversification
The 3 months correlation between 5169 and RHB is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ho Hup Construction 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 Ho Hup 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 Ho Hup Construction 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 Ho Hup i.e., Ho Hup and RHB Bank go up and down completely randomly.
Pair Corralation between Ho Hup and RHB Bank
Assuming the 90 days trading horizon Ho Hup Construction is expected to under-perform the RHB Bank. In addition to that, Ho Hup is 4.8 times more volatile than RHB Bank Bhd. It trades about -0.08 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.17 per unit of volatility. If you would invest 638.00 in RHB Bank Bhd on November 28, 2024 and sell it today you would earn a total of 16.00 from holding RHB Bank Bhd or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ho Hup Construction vs. RHB Bank Bhd
Performance |
| Timeline |
| Ho Hup Construction |
| RHB Bank Bhd |
Ho Hup and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ho Hup and RHB Bank
The main advantage of trading using opposite Ho Hup and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ho Hup 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.| Ho Hup vs. ECM Libra Financial | Ho Hup vs. Hong Leong Bank | Ho Hup vs. Petronas Chemicals Group | Ho Hup vs. MClean Technologies Bhd |
| RHB Bank vs. Berjaya Food Bhd | RHB Bank vs. Awanbiru Technology Bhd | RHB Bank vs. SSF Home Group | RHB Bank vs. Coraza Integrated Technology |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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