Correlation Between Bank Ocbc and Bank Mega
Can any of the company-specific risk be diversified away by investing in both Bank Ocbc and Bank Mega 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 Bank Mega 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 Bank Mega Tbk, you can compare the effects of market volatilities on Bank Ocbc and Bank Mega 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 Bank Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Ocbc and Bank Mega.
Diversification Opportunities for Bank Ocbc and Bank Mega
Average diversification
The 3 months correlation between Bank and Bank is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ocbc Nisp and Bank Mega Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mega 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 Bank Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mega Tbk has no effect on the direction of Bank Ocbc i.e., Bank Ocbc and Bank Mega go up and down completely randomly.
Pair Corralation between Bank Ocbc and Bank Mega
Assuming the 90 days trading horizon Bank Ocbc Nisp is expected to generate 0.92 times more return on investment than Bank Mega. However, Bank Ocbc Nisp is 1.08 times less risky than Bank Mega. It trades about 0.11 of its potential returns per unit of risk. Bank Mega Tbk is currently generating about 0.0 per unit of risk. If you would invest 65,446 in Bank Ocbc Nisp on August 24, 2024 and sell it today you would earn a total of 68,554 from holding Bank Ocbc Nisp or generate 104.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Ocbc Nisp vs. Bank Mega Tbk
Performance |
| Timeline |
| Bank Ocbc Nisp |
| Bank Mega Tbk |
Bank Ocbc and Bank Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Ocbc and Bank Mega
The main advantage of trading using opposite Bank Ocbc and Bank Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Ocbc position performs unexpectedly, Bank Mega 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 Mega will offset losses from the drop in Bank Mega'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 |
| Bank Mega vs. Paninvest Tbk | Bank Mega vs. Maskapai Reasuransi Indonesia | Bank Mega vs. Panin Sekuritas Tbk | Bank Mega vs. Wahana Ottomitra Multiartha |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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