Correlation Between Petronas Chemicals and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Petronas Chemicals 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 Petronas Chemicals and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petronas Chemicals Group and RHB Bank Bhd, you can compare the effects of market volatilities on Petronas Chemicals 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 Petronas Chemicals with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petronas Chemicals and RHB Bank.
Diversification Opportunities for Petronas Chemicals and RHB Bank
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Petronas and RHB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Petronas Chemicals Group 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 Petronas Chemicals 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 Petronas Chemicals Group 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 Petronas Chemicals i.e., Petronas Chemicals and RHB Bank go up and down completely randomly.
Pair Corralation between Petronas Chemicals and RHB Bank
Assuming the 90 days trading horizon Petronas Chemicals Group is expected to under-perform the RHB Bank. In addition to that, Petronas Chemicals is 4.13 times more volatile than RHB Bank Bhd. It trades about -0.26 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.3 per unit of volatility. If you would invest 636.00 in RHB Bank Bhd on August 27, 2024 and sell it today you would earn a total of 25.00 from holding RHB Bank Bhd or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petronas Chemicals Group vs. RHB Bank Bhd
Performance |
| Timeline |
| Petronas Chemicals |
| RHB Bank Bhd |
Petronas Chemicals and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petronas Chemicals and RHB Bank
The main advantage of trading using opposite Petronas Chemicals and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petronas Chemicals 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.| Petronas Chemicals vs. Digistar Bhd | Petronas Chemicals vs. Minetech Resources Bhd | Petronas Chemicals vs. OpenSys M Bhd | Petronas Chemicals vs. Insas Bhd |
| RHB Bank vs. Sunway Construction Group | RHB Bank vs. Binasat Communications Bhd | RHB Bank vs. Sports Toto Berhad | RHB Bank vs. Diversified Gateway Solutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |