Correlation Between Bank Ocbc and Indointernet Tbk
Can any of the company-specific risk be diversified away by investing in both Bank Ocbc and Indointernet Tbk 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 Ocbc and Indointernet Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Ocbc Nisp and Indointernet Tbk PT, you can compare the effects of market volatilities on Bank Ocbc and Indointernet Tbk 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 Ocbc with a short position of Indointernet Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Ocbc and Indointernet Tbk.
Diversification Opportunities for Bank Ocbc and Indointernet Tbk
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Indointernet is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ocbc Nisp and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk and Bank Ocbc 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 Ocbc Nisp are associated (or correlated) with Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of Bank Ocbc i.e., Bank Ocbc and Indointernet Tbk go up and down completely randomly.
Pair Corralation between Bank Ocbc and Indointernet Tbk
Assuming the 90 days trading horizon Bank Ocbc Nisp is expected to generate 0.48 times more return on investment than Indointernet Tbk. However, Bank Ocbc Nisp is 2.1 times less risky than Indointernet Tbk. It trades about -0.02 of its potential returns per unit of risk. Indointernet Tbk PT is currently generating about -0.2 per unit of risk. If you would invest 132,000 in Bank Ocbc Nisp on November 18, 2024 and sell it today you would lose (500.00) from holding Bank Ocbc Nisp or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Ocbc Nisp vs. Indointernet Tbk PT
Performance |
| Timeline |
| Bank Ocbc Nisp |
| Indointernet Tbk |
Bank Ocbc and Indointernet Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Ocbc and Indointernet Tbk
The main advantage of trading using opposite Bank Ocbc and Indointernet Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Ocbc position performs unexpectedly, Indointernet Tbk 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 Indointernet Tbk will offset losses from the drop in Indointernet Tbk's long position.| Bank Ocbc vs. Bank Mega Tbk | Bank Ocbc vs. Bank Pan Indonesia | Bank Ocbc vs. Bank Permata Tbk | Bank Ocbc vs. Bank Cimb Niaga |
| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net Indonesia |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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