Correlation Between Bank of Hawaii and DBS Group
Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii and DBS Group 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 Bank of Hawaii and DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and DBS Group Holdings, you can compare the effects of market volatilities on Bank of Hawaii and DBS Group 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 Bank of Hawaii with a short position of DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and DBS Group.
Diversification Opportunities for Bank of Hawaii and DBS Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and DBS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings and Bank of Hawaii 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 Bank of Hawaii are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Bank of Hawaii i.e., Bank of Hawaii and DBS Group go up and down completely randomly.
Pair Corralation between Bank of Hawaii and DBS Group
Considering the 90-day investment horizon Bank of Hawaii is expected to generate 2.03 times more return on investment than DBS Group. However, Bank of Hawaii is 2.03 times more volatile than DBS Group Holdings. It trades about 0.08 of its potential returns per unit of risk. DBS Group Holdings is currently generating about 0.12 per unit of risk. If you would invest 4,385 in Bank of Hawaii on August 31, 2024 and sell it today you would earn a total of 3,513 from holding Bank of Hawaii or generate 80.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bank of Hawaii vs. DBS Group Holdings
Performance |
| Timeline |
| Bank of Hawaii |
| DBS Group Holdings |
Bank of Hawaii and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Hawaii and DBS Group
The main advantage of trading using opposite Bank of Hawaii and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| Bank of Hawaii vs. Central Pacific Financial | Bank of Hawaii vs. Territorial Bancorp | Bank of Hawaii vs. First Bancorp | Bank of Hawaii vs. Hancock Whitney Corp |
| DBS Group vs. KBC Groep NV | DBS Group vs. United Overseas Bank | DBS Group vs. Embassy Bancorp | DBS Group vs. Overseas Chinese Banking |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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