Correlation Between Apollo Food and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Apollo Food 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 Apollo Food and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apollo Food Holdings and RHB Bank Bhd, you can compare the effects of market volatilities on Apollo Food 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 Apollo Food with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Food and RHB Bank.
Diversification Opportunities for Apollo Food and RHB Bank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Apollo and RHB is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Food Holdings 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 Apollo Food 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 Apollo Food Holdings 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 Apollo Food i.e., Apollo Food and RHB Bank go up and down completely randomly.
Pair Corralation between Apollo Food and RHB Bank
Assuming the 90 days trading horizon Apollo Food Holdings is expected to generate 2.74 times more return on investment than RHB Bank. However, Apollo Food is 2.74 times more volatile than RHB Bank Bhd. It trades about 0.08 of its potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.08 per unit of risk. 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 |
Apollo Food Holdings vs. RHB Bank Bhd
Performance |
| Timeline |
| Apollo Food Holdings |
| RHB Bank Bhd |
Apollo Food and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apollo Food and RHB Bank
The main advantage of trading using opposite Apollo Food and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Food 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.| Apollo Food vs. Duopharma Biotech Bhd | Apollo Food vs. Farm Price Holdings | Apollo Food vs. PMB Technology Bhd | Apollo Food vs. Kawan Food 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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