Correlation Between Industrial Bank and OCI
Can any of the company-specific risk be diversified away by investing in both Industrial Bank and OCI 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 Industrial Bank and OCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Bank and OCI Co, you can compare the effects of market volatilities on Industrial Bank and OCI 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 Industrial Bank with a short position of OCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Bank and OCI.
Diversification Opportunities for Industrial Bank and OCI
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Industrial and OCI is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Bank and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co and Industrial Bank 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 Industrial Bank are associated (or correlated) with OCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of Industrial Bank i.e., Industrial Bank and OCI go up and down completely randomly.
Pair Corralation between Industrial Bank and OCI
Assuming the 90 days trading horizon Industrial Bank is expected to generate 0.46 times more return on investment than OCI. However, Industrial Bank is 2.18 times less risky than OCI. It trades about 0.11 of its potential returns per unit of risk. OCI Co is currently generating about -0.19 per unit of risk. If you would invest 1,453,000 in Industrial Bank on August 30, 2024 and sell it today you would earn a total of 38,000 from holding Industrial Bank or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Bank vs. OCI Co
Performance |
| Timeline |
| Industrial Bank |
| OCI Co |
Industrial Bank and OCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Bank and OCI
The main advantage of trading using opposite Industrial Bank and OCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Bank position performs unexpectedly, OCI 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 OCI will offset losses from the drop in OCI's long position.| Industrial Bank vs. Woori Technology | Industrial Bank vs. Ilji Technology Co | Industrial Bank vs. QUALITAS SEMICONDUCTOR LTD | Industrial Bank vs. People Technology |
| OCI vs. Daejoo Electronic Materials | OCI vs. NewFlex Technology Co | OCI vs. IC Technology Co | OCI vs. Korea Electronic Certification |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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