Correlation Between Bank Ocbc and Multifiling Mitra

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

Diversification Opportunities for Bank Ocbc and Multifiling Mitra

0.18

Correlation Coefficient

Bank Ocbc  Multifiling Mitra

Average diversification

The 3 months correlation between Bank and Multifiling is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank Ocbc Nisp and Multifiling Mitra Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifiling Mitra 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 Multifiling Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifiling Mitra has no effect on the direction of Bank Ocbc i.e., Bank Ocbc and Multifiling Mitra go up and down completely randomly.

Pair Corralation between Bank Ocbc and Multifiling Mitra

Assuming the 90 days trading horizon Bank Ocbc Nisp is expected to generate 2.04 times more return on investment than Multifiling Mitra. However, Bank Ocbc is 2.04 times more volatile than Multifiling Mitra Indonesia. It trades about 0.09 of its potential returns per unit of risk. Multifiling Mitra Indonesia is currently generating about 0.13 per unit of risk. If you would invest  130,500  in Bank Ocbc Nisp on April 25, 2025 and sell it today you would earn a total of  4,500  from holding Bank Ocbc Nisp or generate 3.45% 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.  Multifiling Mitra Indonesia

Bank Ocbc Nisp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bank Ocbc Nisp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Multifiling Mitra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Multifiling Mitra Indonesia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Multifiling Mitra is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bank Ocbc and Multifiling Mitra

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

The idea behind Bank Ocbc Nisp and Multifiling Mitra Indonesia 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.