Correlation Between Okta and Bhakti Multi
Can any of the company-specific risk be diversified away by investing in both Okta and Bhakti Multi 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 Okta and Bhakti Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Bhakti Multi Artha, you can compare the effects of market volatilities on Okta and Bhakti Multi 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 Okta with a short position of Bhakti Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Bhakti Multi.
Diversification Opportunities for Okta and Bhakti Multi
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Bhakti is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Bhakti Multi Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhakti Multi Artha and Okta 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 Okta Inc are associated (or correlated) with Bhakti Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhakti Multi Artha has no effect on the direction of Okta i.e., Okta and Bhakti Multi go up and down completely randomly.
Pair Corralation between Okta and Bhakti Multi
Given the investment horizon of 90 days Okta Inc is expected to generate 1.25 times more return on investment than Bhakti Multi. However, Okta is 1.25 times more volatile than Bhakti Multi Artha. It trades about 0.02 of its potential returns per unit of risk. Bhakti Multi Artha is currently generating about -0.04 per unit of risk. If you would invest 7,140 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 616.00 from holding Okta Inc or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.97% |
| Values | Daily Returns |
Okta Inc vs. Bhakti Multi Artha
Performance |
| Timeline |
| Okta Inc |
| Bhakti Multi Artha |
Okta and Bhakti Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Bhakti Multi
The main advantage of trading using opposite Okta and Bhakti Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Bhakti Multi 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 Bhakti Multi will offset losses from the drop in Bhakti Multi's long position.The idea behind Okta Inc and Bhakti Multi Artha 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.| Bhakti Multi vs. Metro Healthcare Indonesia | Bhakti Multi vs. Bintang Oto Global | Bhakti Multi vs. Surya Permata Andalan | Bhakti Multi vs. Capital Financial Indonesia |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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