Correlation Between Salesforce and Okta
Can any of the company-specific risk be diversified away by investing in both Salesforce 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 Salesforce and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Okta Inc, you can compare the effects of market volatilities on Salesforce 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 Salesforce with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Okta.
Diversification Opportunities for Salesforce and Okta
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and Okta is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Okta go up and down completely randomly.
Pair Corralation between Salesforce and Okta
Considering the 90-day investment horizon Salesforce is expected to generate 1.17 times more return on investment than Okta. However, Salesforce is 1.17 times more volatile than Okta Inc. It trades about 0.36 of its potential returns per unit of risk. Okta Inc is currently generating about 0.13 per unit of risk. If you would invest 29,377 in Salesforce on August 27, 2024 and sell it today you would earn a total of 4,825 from holding Salesforce or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Okta Inc
Performance |
| Timeline |
| Salesforce |
| Okta Inc |
Salesforce and Okta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Okta
The main advantage of trading using opposite Salesforce and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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