Correlation Between AMMB Holdings and Radiant Globaltech

Can any of the company-specific risk be diversified away by investing in both AMMB Holdings and Radiant Globaltech 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 AMMB Holdings and Radiant Globaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AMMB Holdings and Radiant Globaltech

0.21

Correlation Coefficient

AMMB Holdings  Radiant Globaltech

Modest diversification

The 3 months correlation between AMMB and Radiant is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding AMMB Holdings Bhd and Radiant Globaltech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radiant Globaltech Bhd and AMMB Holdings 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 AMMB Holdings Bhd are associated (or correlated) with Radiant Globaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radiant Globaltech Bhd has no effect on the direction of AMMB Holdings i.e., AMMB Holdings and Radiant Globaltech go up and down completely randomly.

Pair Corralation between AMMB Holdings and Radiant Globaltech

Assuming the 90 days trading horizon AMMB Holdings Bhd is expected to generate 0.47 times more return on investment than Radiant Globaltech. However, AMMB Holdings Bhd is 2.12 times less risky than Radiant Globaltech. It trades about 0.13 of its potential returns per unit of risk. Radiant Globaltech Bhd is currently generating about 0.06 per unit of risk. If you would invest  529.00  in AMMB Holdings Bhd on November 29, 2024 and sell it today you would earn a total of  42.00  from holding AMMB Holdings Bhd or generate 7.94% return on investment over 90 days.

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

AMMB Holdings Bhd  vs.  Radiant Globaltech Bhd

AMMB Holdings Bhd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AMMB Holdings Bhd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AMMB Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Radiant Globaltech Bhd

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Radiant Globaltech Bhd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Radiant Globaltech may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with AMMB Holdings and Radiant Globaltech

The main advantage of trading using opposite AMMB Holdings and Radiant Globaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMMB Holdings position performs unexpectedly, Radiant Globaltech 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 Radiant Globaltech will offset losses from the drop in Radiant Globaltech's long position.

The idea behind AMMB Holdings Bhd and Radiant Globaltech 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 CEOs Directory module to screen CEOs from public companies around the world.