Correlation Between Bank Woori and Bank Ocbc
Can any of the company-specific risk be diversified away by investing in both Bank Woori 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 Woori 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 Woori Saudara and Bank Ocbc Nisp, you can compare the effects of market volatilities on Bank Woori 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 Woori with a short position of Bank Ocbc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Woori and Bank Ocbc.
Diversification Opportunities for Bank Woori and Bank Ocbc
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Bank is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bank Woori Saudara 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 Woori 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 Woori Saudara 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 Woori i.e., Bank Woori and Bank Ocbc go up and down completely randomly.
Pair Corralation between Bank Woori and Bank Ocbc
Assuming the 90 days trading horizon Bank Woori Saudara is expected to under-perform the Bank Ocbc. But the stock apears to be less risky and, when comparing its historical volatility, Bank Woori Saudara is 1.15 times less risky than Bank Ocbc. The stock trades about -0.04 of its potential returns per unit of risk. The Bank Ocbc Nisp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 105,450 in Bank Ocbc Nisp on August 31, 2024 and sell it today you would earn a total of 28,550 from holding Bank Ocbc Nisp or generate 27.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Woori Saudara vs. Bank Ocbc Nisp
Performance |
| Timeline |
| Bank Woori Saudara |
| Bank Ocbc Nisp |
Bank Woori and Bank Ocbc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Woori and Bank Ocbc
The main advantage of trading using opposite Bank Woori and Bank Ocbc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Woori 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 Woori vs. Bank Ocbc Nisp | Bank Woori vs. Bank Pan Indonesia | Bank Woori vs. Bank Mega Tbk | Bank Woori vs. Bank Mayapada Internasional |
| Bank Ocbc vs. Bank BRISyariah Tbk | Bank Ocbc vs. Ace Hardware Indonesia | Bank Ocbc vs. Merdeka Copper Gold | Bank Ocbc vs. Mitra Pinasthika Mustika |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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