Correlation Between Bank Ocbc and Dayamitra Telekomunikasi

Can any of the company-specific risk be diversified away by investing in both Bank Ocbc and Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi PT, you can compare the effects of market volatilities on Bank Ocbc and Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Ocbc and Dayamitra Telekomunikasi.

Diversification Opportunities for Bank Ocbc and Dayamitra Telekomunikasi

-0.42

Correlation Coefficient

Bank Ocbc  Dayamitra Telekomunikasi

Very good diversification

The 3 months correlation between Bank and Dayamitra is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ocbc Nisp and Dayamitra Telekomunikasi PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayamitra Telekomunikasi has no effect on the direction of Bank Ocbc i.e., Bank Ocbc and Dayamitra Telekomunikasi go up and down completely randomly.

Pair Corralation between Bank Ocbc and Dayamitra Telekomunikasi

Assuming the 90 days trading horizon Bank Ocbc is expected to generate 1.61 times less return on investment than Dayamitra Telekomunikasi. But when comparing it to its historical volatility, Bank Ocbc Nisp is 1.43 times less risky than Dayamitra Telekomunikasi. It trades about 0.1 of its potential returns per unit of risk. Dayamitra Telekomunikasi PT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  66,000  in Dayamitra Telekomunikasi PT on October 25, 2024 and sell it today you would earn a total of  2,000  from holding Dayamitra Telekomunikasi PT or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Bank Ocbc Nisp  vs.  Dayamitra Telekomunikasi PT

Bank Ocbc Nisp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Ocbc Nisp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bank Ocbc is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Dayamitra Telekomunikasi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dayamitra Telekomunikasi PT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dayamitra Telekomunikasi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bank Ocbc and Dayamitra Telekomunikasi

The main advantage of trading using opposite Bank Ocbc and Dayamitra Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Ocbc position performs unexpectedly, Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi will offset losses from the drop in Dayamitra Telekomunikasi's long position.

The idea behind Bank Ocbc Nisp and Dayamitra Telekomunikasi PT 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.

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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.