Correlation Between Okta and PT Unilever
Can any of the company-specific risk be diversified away by investing in both Okta and PT Unilever 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 PT Unilever into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and PT Unilever Indonesia, you can compare the effects of market volatilities on Okta and PT Unilever 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 PT Unilever. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and PT Unilever.
Diversification Opportunities for Okta and PT Unilever
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and UNLRF is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and PT Unilever Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Unilever Indonesia 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 PT Unilever. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Unilever Indonesia has no effect on the direction of Okta i.e., Okta and PT Unilever go up and down completely randomly.
Pair Corralation between Okta and PT Unilever
Given the investment horizon of 90 days Okta Inc is expected to generate 0.5 times more return on investment than PT Unilever. However, Okta Inc is 1.99 times less risky than PT Unilever. It trades about 0.13 of its potential returns per unit of risk. PT Unilever Indonesia is currently generating about -0.3 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. PT Unilever Indonesia
Performance |
| Timeline |
| Okta Inc |
| PT Unilever Indonesia |
Okta and PT Unilever Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and PT Unilever
The main advantage of trading using opposite Okta and PT Unilever positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, PT Unilever 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 PT Unilever will offset losses from the drop in PT Unilever's long position.The idea behind Okta Inc and PT Unilever 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.| PT Unilever vs. LOreal Co ADR | PT Unilever vs. Unilever PLC ADR | PT Unilever vs. Kimberly Clark | PT Unilever vs. The Clorox |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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