Correlation Between Okta and Korea Information
Can any of the company-specific risk be diversified away by investing in both Okta and Korea Information 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 Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Korea Information Communications, you can compare the effects of market volatilities on Okta and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Korea Information.
Diversification Opportunities for Okta and Korea Information
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Korea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Okta i.e., Okta and Korea Information go up and down completely randomly.
Pair Corralation between Okta and Korea Information
Given the investment horizon of 90 days Okta Inc is expected to generate 1.89 times more return on investment than Korea Information. However, Okta is 1.89 times more volatile than Korea Information Communications. It trades about 0.13 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.05 per unit of risk. If you would invest 7,325 in Okta Inc on August 28, 2024 and sell it today you would earn a total of 325.00 from holding Okta Inc or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Korea Information Communicatio
Performance |
| Timeline |
| Okta Inc |
| Korea Information |
Okta and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Korea Information
The main advantage of trading using opposite Okta and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.The idea behind Okta Inc and Korea Information Communications 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.| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang Tech Co |
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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