Correlation Between Okta and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Okta and Exploitasi Energi 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 Exploitasi Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Okta and Exploitasi Energi 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 Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Exploitasi Energi.
Diversification Opportunities for Okta and Exploitasi Energi
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Exploitasi is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi 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 Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Okta i.e., Okta and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Okta and Exploitasi Energi
Given the investment horizon of 90 days Okta is expected to generate 7.83 times less return on investment than Exploitasi Energi. But when comparing it to its historical volatility, Okta Inc is 5.93 times less risky than Exploitasi Energi. It trades about 0.13 of its potential returns per unit of risk. Exploitasi Energi Indonesia is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Exploitasi Energi Indonesia on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Exploitasi Energi Indonesia or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Okta Inc |
| Exploitasi Energi |
Okta and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Exploitasi Energi
The main advantage of trading using opposite Okta and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi's long position.The idea behind Okta Inc and Exploitasi Energi 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.| Exploitasi Energi vs. Central Proteina Prima | Exploitasi Energi vs. Darma Henwa Tbk | Exploitasi Energi vs. Bakrieland Development Tbk | Exploitasi Energi vs. Energi Mega Persada |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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