Correlation Between Bank Negara and Bank Ocbc
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Bank Ocbc 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 Negara and Bank Ocbc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Bank Ocbc Nisp, you can compare the effects of market volatilities on Bank Negara and Bank Ocbc 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 Negara with a short position of Bank Ocbc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Bank Ocbc.
Diversification Opportunities for Bank Negara and Bank Ocbc
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Bank Ocbc Nisp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ocbc Nisp and Bank Negara 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 Negara Indonesia are associated (or correlated) with Bank Ocbc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ocbc Nisp has no effect on the direction of Bank Negara i.e., Bank Negara and Bank Ocbc go up and down completely randomly.
Pair Corralation between Bank Negara and Bank Ocbc
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Bank Ocbc. In addition to that, Bank Negara is 2.42 times more volatile than Bank Ocbc Nisp. It trades about -0.01 of its total potential returns per unit of risk. Bank Ocbc Nisp is currently generating about 0.01 per unit of volatility. If you would invest 133,500 in Bank Ocbc Nisp on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Bank Ocbc Nisp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Bank Ocbc Nisp
Performance |
| Timeline |
| Bank Negara Indonesia |
| Bank Ocbc Nisp |
Bank Negara and Bank Ocbc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Bank Ocbc
The main advantage of trading using opposite Bank Negara and Bank Ocbc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Bank Ocbc 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 Bank Ocbc will offset losses from the drop in Bank Ocbc's long position.| Bank Negara vs. Bank Mandiri Persero | Bank Negara vs. Bank Rakyat Indonesia | Bank Negara vs. Bank Central Asia | Bank Negara vs. Astra International Tbk |
| Bank Ocbc vs. Bank Mega Tbk | Bank Ocbc vs. Bank Pan Indonesia | Bank Ocbc vs. Bank Permata Tbk | Bank Ocbc vs. Bank Cimb Niaga |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |