Correlation Between Okta and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Okta and Haesung Industrial 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 Haesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Haesung Industrial Co, you can compare the effects of market volatilities on Okta and Haesung Industrial 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 Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Haesung Industrial.
Diversification Opportunities for Okta and Haesung Industrial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and Haesung is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial 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 Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Okta i.e., Okta and Haesung Industrial go up and down completely randomly.
Pair Corralation between Okta and Haesung Industrial
Given the investment horizon of 90 days Okta Inc is expected to generate 0.94 times more return on investment than Haesung Industrial. However, Okta Inc is 1.07 times less risky than Haesung Industrial. It trades about 0.02 of its potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.1 per unit of risk. If you would invest 7,583 in Okta Inc on August 25, 2024 and sell it today you would earn a total of 74.00 from holding Okta Inc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.33% |
| Values | Daily Returns |
Okta Inc vs. Haesung Industrial Co
Performance |
| Timeline |
| Okta Inc |
| Haesung Industrial |
Okta and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Haesung Industrial
The main advantage of trading using opposite Okta and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Haesung Industrial 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.The idea behind Okta Inc and Haesung Industrial Co 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.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Mirae Asset Daewoo | Haesung Industrial vs. UNISEM 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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