Correlation Between Multilaser Industrial and Okta

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

By analyzing existing cross correlation between Multilaser Industrial SA and Okta Inc, you can compare the effects of market volatilities on Multilaser Industrial and Okta 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 Multilaser Industrial with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multilaser Industrial and Okta.

Diversification Opportunities for Multilaser Industrial and Okta

-0.91

Correlation Coefficient

Multilaser Industrial  Okta

Pay attention - limited upside

The 3 months correlation between Multilaser and Okta is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Multilaser Industrial SA and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Multilaser Industrial 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 Multilaser Industrial SA are associated (or correlated) with Okta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okta Inc has no effect on the direction of Multilaser Industrial i.e., Multilaser Industrial and Okta go up and down completely randomly.

Pair Corralation between Multilaser Industrial and Okta

Assuming the 90 days trading horizon Multilaser Industrial SA is expected to under-perform the Okta. In addition to that, Multilaser Industrial is 1.55 times more volatile than Okta Inc. It trades about -0.03 of its total potential returns per unit of risk. Okta Inc is currently generating about 0.04 per unit of volatility. If you would invest  1,730  in Okta Inc on October 4, 2024 and sell it today you would earn a total of  727.00  from holding Okta Inc or generate 42.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.2%
Values	Daily Returns

Multilaser Industrial SA  vs.  Okta Inc

Multilaser Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multilaser Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Okta Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Okta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Multilaser Industrial and Okta

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

The idea behind Multilaser Industrial SA and Okta Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.