Correlation Between Okta and Silvercorp Metals
Can any of the company-specific risk be diversified away by investing in both Okta and Silvercorp Metals 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 Silvercorp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Silvercorp Metals, you can compare the effects of market volatilities on Okta and Silvercorp Metals 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 Silvercorp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Silvercorp Metals.
Diversification Opportunities for Okta and Silvercorp Metals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Silvercorp is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Silvercorp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercorp Metals 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 Silvercorp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercorp Metals has no effect on the direction of Okta i.e., Okta and Silvercorp Metals go up and down completely randomly.
Pair Corralation between Okta and Silvercorp Metals
Given the investment horizon of 90 days Okta is expected to generate 1.52 times less return on investment than Silvercorp Metals. But when comparing it to its historical volatility, Okta Inc is 1.22 times less risky than Silvercorp Metals. It trades about 0.02 of its potential returns per unit of risk. Silvercorp Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 411.00 in Silvercorp Metals on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Silvercorp Metals or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.69% |
| Values | Daily Returns |
Okta Inc vs. Silvercorp Metals
Performance |
| Timeline |
| Okta Inc |
| Silvercorp Metals |
Okta and Silvercorp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Silvercorp Metals
The main advantage of trading using opposite Okta and Silvercorp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Silvercorp Metals 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 Silvercorp Metals will offset losses from the drop in Silvercorp Metals' long position.The idea behind Okta Inc and Silvercorp Metals 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.| Silvercorp Metals vs. Neometals | Silvercorp Metals vs. Coor Service Management | Silvercorp Metals vs. Aeorema Communications Plc | Silvercorp Metals vs. JLEN Environmental Assets |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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