Correlation Between Okta and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Okta and Ace Oldfields 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 Ace Oldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Ace Oldfields PT, you can compare the effects of market volatilities on Okta and Ace Oldfields 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 Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Ace Oldfields.
Diversification Opportunities for Okta and Ace Oldfields
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Ace is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields PT 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 Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Okta i.e., Okta and Ace Oldfields go up and down completely randomly.
Pair Corralation between Okta and Ace Oldfields
Given the investment horizon of 90 days Okta Inc is expected to generate 0.92 times more return on investment than Ace Oldfields. However, Okta Inc is 1.09 times less risky than Ace Oldfields. It trades about 0.11 of its potential returns per unit of risk. Ace Oldfields PT is currently generating about -0.18 per unit of risk. If you would invest 7,381 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 302.00 from holding Okta Inc or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Okta Inc vs. Ace Oldfields PT
Performance |
| Timeline |
| Okta Inc |
| Ace Oldfields PT |
Okta and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Ace Oldfields
The main advantage of trading using opposite Okta and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' long position.The idea behind Okta Inc and Ace Oldfields 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.| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Prima Andalan Mandiri |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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