Correlation Between Okta and Fortinet
Can any of the company-specific risk be diversified away by investing in both Okta and Fortinet 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 Fortinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Fortinet, you can compare the effects of market volatilities on Okta and Fortinet 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 Fortinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Fortinet.
Diversification Opportunities for Okta and Fortinet
Weak diversification
The 3 months correlation between Okta and Fortinet is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Fortinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortinet 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 Fortinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortinet has no effect on the direction of Okta i.e., Okta and Fortinet go up and down completely randomly.
Pair Corralation between Okta and Fortinet
Assuming the 90 days trading horizon Okta is expected to generate 62.82 times less return on investment than Fortinet. In addition to that, Okta is 1.17 times more volatile than Fortinet. It trades about 0.0 of its total potential returns per unit of risk. Fortinet is currently generating about 0.17 per unit of volatility. If you would invest 14,940 in Fortinet on September 3, 2024 and sell it today you would earn a total of 13,457 from holding Fortinet or generate 90.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Fortinet
Performance |
| Timeline |
| Okta Inc |
| Fortinet |
Okta and Fortinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Fortinet
The main advantage of trading using opposite Okta and Fortinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Fortinet 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 Fortinet will offset losses from the drop in Fortinet's long position.| Okta vs. Marvell Technology | Okta vs. The Home Depot | Okta vs. Brpr Corporate Offices | Okta vs. Lupatech SA |
| Fortinet vs. Uber Technologies | Fortinet vs. Unity Software | Fortinet vs. Align Technology | Fortinet vs. Brpr Corporate Offices |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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