Correlation Between Senheng New and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Senheng New 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 Senheng New and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senheng New Retail and RHB Bank Bhd, you can compare the effects of market volatilities on Senheng New 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 Senheng New with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senheng New and RHB Bank.
Diversification Opportunities for Senheng New and RHB Bank
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Senheng and RHB is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Senheng New Retail 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 Senheng New 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 Senheng New Retail 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 Senheng New i.e., Senheng New and RHB Bank go up and down completely randomly.
Pair Corralation between Senheng New and RHB Bank
Assuming the 90 days trading horizon Senheng New Retail is expected to under-perform the RHB Bank. In addition to that, Senheng New is 3.25 times more volatile than RHB Bank Bhd. It trades about -0.07 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.09 per unit of volatility. If you would invest 505.00 in RHB Bank Bhd on August 30, 2024 and sell it today you would earn a total of 173.00 from holding RHB Bank Bhd or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senheng New Retail vs. RHB Bank Bhd
Performance |
| Timeline |
| Senheng New Retail |
| RHB Bank Bhd |
Senheng New and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senheng New and RHB Bank
The main advantage of trading using opposite Senheng New and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senheng New 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.| Senheng New vs. Minetech Resources Bhd | Senheng New vs. Sunzen Biotech Bhd | Senheng New vs. Hengyuan Refining | Senheng New vs. Impiana Hotels Bhd |
| RHB Bank vs. IHH Healthcare Bhd | RHB Bank vs. FARM FRESH BERHAD | RHB Bank vs. Southern Steel Bhd | RHB Bank vs. Ho Hup Construction |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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