Correlation Between Natura Co and Okta
Can any of the company-specific risk be diversified away by investing in both Natura Co 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 Natura Co and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura Co Holding and Okta Inc, you can compare the effects of market volatilities on Natura Co 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 Natura Co with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura Co and Okta.
Diversification Opportunities for Natura Co and Okta
Excellent diversification
The 3 months correlation between Natura and Okta is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Natura Co Holding and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Natura Co 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 Natura Co Holding 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 Natura Co i.e., Natura Co and Okta go up and down completely randomly.
Pair Corralation between Natura Co and Okta
Assuming the 90 days trading horizon Natura Co Holding is expected to under-perform the Okta. In addition to that, Natura Co is 1.18 times more volatile than Okta Inc. It trades about -0.06 of its total potential returns per unit of risk. Okta Inc is currently generating about 0.05 per unit of volatility. If you would invest 2,574 in Okta Inc on October 25, 2024 and sell it today you would earn a total of 44.00 from holding Okta Inc or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Natura Co Holding vs. Okta Inc
Performance |
| Timeline |
| Natura Co Holding |
| Okta Inc |
Natura Co and Okta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natura Co and Okta
The main advantage of trading using opposite Natura Co and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura Co 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.| Natura Co vs. United Rentals | Natura Co vs. Globus Medical, | Natura Co vs. Arrow Electronics, | Natura Co vs. Broadcom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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