Correlation Between Public Packages and RHB Bank
Can any of the company-specific risk be diversified away by investing in both Public Packages 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 Public Packages and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Packages Holdings and RHB Bank Bhd, you can compare the effects of market volatilities on Public Packages 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 Public Packages with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Packages and RHB Bank.
Diversification Opportunities for Public Packages and RHB Bank
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Public and RHB is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Public Packages 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 Public Packages 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 Public Packages 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 Public Packages i.e., Public Packages and RHB Bank go up and down completely randomly.
Pair Corralation between Public Packages and RHB Bank
Assuming the 90 days trading horizon Public Packages is expected to generate 3.68 times less return on investment than RHB Bank. In addition to that, Public Packages is 3.22 times more volatile than RHB Bank Bhd. It trades about 0.01 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 522.00 in RHB Bank Bhd on August 27, 2024 and sell it today you would earn a total of 128.00 from holding RHB Bank Bhd or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Packages Holdings vs. RHB Bank Bhd
Performance |
| Timeline |
| Public Packages Holdings |
| RHB Bank Bhd |
Public Packages and RHB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Packages and RHB Bank
The main advantage of trading using opposite Public Packages and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Packages 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.| Public Packages vs. Malayan Banking Bhd | Public Packages vs. Public Bank Bhd | Public Packages vs. Petronas Chemicals Group | Public Packages vs. Tenaga Nasional Bhd |
| RHB Bank vs. Kawan Food Bhd | RHB Bank vs. Public Packages Holdings | RHB Bank vs. Malayan Banking Bhd | RHB Bank vs. Oriental Food Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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