Correlation Between NYSE Composite and Okta
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Okta Inc, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Okta.
Diversification Opportunities for NYSE Composite and Okta
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Okta is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Okta go up and down completely randomly.
Pair Corralation between NYSE Composite and Okta
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.8 times less return on investment than Okta. But when comparing it to its historical volatility, NYSE Composite is 2.66 times less risky than Okta. It trades about 0.24 of its potential returns per unit of risk. Okta Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,224 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 433.00 from holding Okta Inc or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Okta Inc
Performance |
| Timeline |
NYSE Composite and Okta Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Okta Inc
Pair trading matchups for Okta
Pair Trading with NYSE Composite and Okta
The main advantage of trading using opposite NYSE Composite and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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