Correlation Between Okta and Duta Pertiwi

Can any of the company-specific risk be diversified away by investing in both Okta and Duta Pertiwi 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 Duta Pertiwi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Okta Inc and Duta Pertiwi Tbk, you can compare the effects of market volatilities on Okta and Duta Pertiwi 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 Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Duta Pertiwi.

Diversification Opportunities for Okta and Duta Pertiwi

-0.07

Correlation Coefficient

Okta  Duta Pertiwi

Good diversification

The 3 months correlation between Okta and Duta is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Duta Pertiwi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi Tbk 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 Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Tbk has no effect on the direction of Okta i.e., Okta and Duta Pertiwi go up and down completely randomly.

Pair Corralation between Okta and Duta Pertiwi

Given the investment horizon of 90 days Okta Inc is expected to generate 1.39 times more return on investment than Duta Pertiwi. However, Okta is 1.39 times more volatile than Duta Pertiwi Tbk. It trades about 0.01 of its potential returns per unit of risk. Duta Pertiwi Tbk is currently generating about -0.01 per unit of risk. If you would invest  7,603  in Okta Inc on August 31, 2024 and sell it today you would earn a total of  39.00  from holding Okta Inc or generate 0.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.69%
Values	Daily Returns

Okta Inc  vs.  Duta Pertiwi Tbk

Okta Inc

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Okta is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Duta Pertiwi Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duta Pertiwi Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Duta Pertiwi 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 Okta and Duta Pertiwi

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

The idea behind Okta Inc and Duta Pertiwi Tbk 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.