Correlation Between Akasha Wira and Bank Ocbc
Can any of the company-specific risk be diversified away by investing in both Akasha Wira 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 Akasha Wira and Bank Ocbc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akasha Wira International and Bank Ocbc Nisp, you can compare the effects of market volatilities on Akasha Wira 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 Akasha Wira with a short position of Bank Ocbc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akasha Wira and Bank Ocbc.
Diversification Opportunities for Akasha Wira and Bank Ocbc
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Akasha and Bank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Akasha Wira International 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 Akasha Wira 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 Akasha Wira International 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 Akasha Wira i.e., Akasha Wira and Bank Ocbc go up and down completely randomly.
Pair Corralation between Akasha Wira and Bank Ocbc
Assuming the 90 days trading horizon Akasha Wira International is expected to under-perform the Bank Ocbc. In addition to that, Akasha Wira is 1.14 times more volatile than Bank Ocbc Nisp. It trades about -0.15 of its total potential returns per unit of risk. Bank Ocbc Nisp is currently generating about -0.08 per unit of volatility. If you would invest 134,425 in Bank Ocbc Nisp on January 20, 2024 and sell it today you would lose (2,925) from holding Bank Ocbc Nisp or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akasha Wira International vs. Bank Ocbc Nisp
Performance |
| Timeline |
| Akasha Wira International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank Ocbc Nisp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Akasha Wira and Bank Ocbc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akasha Wira and Bank Ocbc
The main advantage of trading using opposite Akasha Wira and Bank Ocbc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akasha Wira 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.The idea behind Akasha Wira International and Bank Ocbc Nisp 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 Stocks Directory module to find actively traded stocks across global markets.
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