Correlation Between Oversea Chinese and OVERSEA CHINUNSPADR2

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Oversea Chinese and OVERSEA CHINUNSPADR2 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 Oversea Chinese and OVERSEA CHINUNSPADR2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oversea Chinese Banking and OVERSEA CHINUNSPADR2, you can compare the effects of market volatilities on Oversea Chinese and OVERSEA CHINUNSPADR2 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 Oversea Chinese with a short position of OVERSEA CHINUNSPADR2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oversea Chinese and OVERSEA CHINUNSPADR2.

Diversification Opportunities for Oversea Chinese and OVERSEA CHINUNSPADR2

OverseaOVERSEADiversified AwayOverseaOVERSEADiversified Away100%
0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Oversea and OVERSEA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Oversea Chinese Banking and OVERSEA CHINUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVERSEA CHINUNSPADR2 and Oversea Chinese 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 Oversea Chinese Banking are associated (or correlated) with OVERSEA CHINUNSPADR2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVERSEA CHINUNSPADR2 has no effect on the direction of Oversea Chinese i.e., Oversea Chinese and OVERSEA CHINUNSPADR2 go up and down completely randomly.

Pair Corralation between Oversea Chinese and OVERSEA CHINUNSPADR2

Assuming the 90 days trading horizon Oversea Chinese Banking is expected to generate 1.21 times more return on investment than OVERSEA CHINUNSPADR2. However, Oversea Chinese is 1.21 times more volatile than OVERSEA CHINUNSPADR2. It trades about 0.12 of its potential returns per unit of risk. OVERSEA CHINUNSPADR2 is currently generating about 0.14 per unit of risk. If you would invest  857.00  in Oversea Chinese Banking on November 21, 2024 and sell it today you would earn a total of  395.00  from holding Oversea Chinese Banking or generate 46.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.56%
ValuesDaily Returns

Oversea Chinese Banking  vs.  OVERSEA CHINUNSPADR2

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15OCBA OCBB
       Timeline  
Oversea Chinese Banking 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Oversea Chinese Banking are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Oversea Chinese may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11.411.611.81212.212.412.6
OVERSEA CHINUNSPADR2 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in OVERSEA CHINUNSPADR2 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, OVERSEA CHINUNSPADR2 may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.52323.52424.525

Oversea Chinese and OVERSEA CHINUNSPADR2 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.1-3.07-2.04-1.010.01.072.163.254.34 0.10.20.30.4
JavaScript chart by amCharts 3.21.15OCBA OCBB
       Returns  

Pair Trading with Oversea Chinese and OVERSEA CHINUNSPADR2

The main advantage of trading using opposite Oversea Chinese and OVERSEA CHINUNSPADR2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oversea Chinese position performs unexpectedly, OVERSEA CHINUNSPADR2 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 OVERSEA CHINUNSPADR2 will offset losses from the drop in OVERSEA CHINUNSPADR2's long position.
The idea behind Oversea Chinese Banking and OVERSEA CHINUNSPADR2 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.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated