Correlation Between Binasat Communications and RHB Bank

Can any of the company-specific risk be diversified away by investing in both Binasat Communications 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 Binasat Communications and RHB Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Binasat Communications Bhd and RHB Bank Bhd, you can compare the effects of market volatilities on Binasat Communications 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 Binasat Communications with a short position of RHB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binasat Communications and RHB Bank.

Diversification Opportunities for Binasat Communications and RHB Bank

-0.72

Correlation Coefficient

Binasat Communications  RHB Bank

Pay attention - limited upside

The 3 months correlation between Binasat and RHB is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Binasat Communications Bhd 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 Binasat Communications 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 Binasat Communications Bhd 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 Binasat Communications i.e., Binasat Communications and RHB Bank go up and down completely randomly.

Pair Corralation between Binasat Communications and RHB Bank

Assuming the 90 days trading horizon Binasat Communications Bhd is expected to under-perform the RHB Bank. In addition to that, Binasat Communications is 3.3 times more volatile than RHB Bank Bhd. It trades about -0.08 of its total potential returns per unit of risk. RHB Bank Bhd is currently generating about 0.18 per unit of volatility. If you would invest  622.00  in RHB Bank Bhd on December 31, 2024 and sell it today you would earn a total of  62.00  from holding RHB Bank Bhd or generate 9.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Binasat Communications Bhd  vs.  RHB Bank Bhd

Binasat Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Binasat Communications Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

RHB Bank Bhd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RHB Bank Bhd are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, RHB Bank may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Binasat Communications and RHB Bank

The main advantage of trading using opposite Binasat Communications and RHB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binasat Communications 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.

The idea behind Binasat Communications Bhd and RHB Bank Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.