Correlation Between Direct Line and RHB Capital
Can any of the company-specific risk be diversified away by investing in both Direct Line and RHB Capital 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 Direct Line and RHB Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Line Insurance and RHB Capital Berhad, you can compare the effects of market volatilities on Direct Line and RHB Capital 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 Direct Line with a short position of RHB Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Line and RHB Capital.
Diversification Opportunities for Direct Line and RHB Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Direct and RHB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Direct Line Insurance and RHB Capital Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHB Capital Berhad and Direct Line 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 Direct Line Insurance are associated (or correlated) with RHB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHB Capital Berhad has no effect on the direction of Direct Line i.e., Direct Line and RHB Capital go up and down completely randomly.
Pair Corralation between Direct Line and RHB Capital
If you would invest 122.00 in RHB Capital Berhad on October 10, 2025 and sell it today you would earn a total of 0.00 from holding RHB Capital Berhad or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Direct Line Insurance vs. RHB Capital Berhad
Performance |
| Timeline |
| Direct Line Insurance |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| RHB Capital Berhad |
Direct Line and RHB Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Line and RHB Capital
The main advantage of trading using opposite Direct Line and RHB Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Line position performs unexpectedly, RHB Capital 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 Capital will offset losses from the drop in RHB Capital's long position.| Direct Line vs. China Taiping Insurance | Direct Line vs. Grupo de Inversiones | Direct Line vs. ZhongAn Online P | Direct Line vs. Rand Merchant Investment |
| RHB Capital vs. First International Bank | RHB Capital vs. Jyske Bank AS | RHB Capital vs. Commercial International Bank | RHB Capital vs. AMMB Holdings Berhad |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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