Correlation Between Okta and KIM KINDEX
Can any of the company-specific risk be diversified away by investing in both Okta and KIM KINDEX 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 KIM KINDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and KIM KINDEX 200, you can compare the effects of market volatilities on Okta and KIM KINDEX 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 KIM KINDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and KIM KINDEX.
Diversification Opportunities for Okta and KIM KINDEX
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and KIM is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and KIM KINDEX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIM KINDEX 200 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 KIM KINDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIM KINDEX 200 has no effect on the direction of Okta i.e., Okta and KIM KINDEX go up and down completely randomly.
Pair Corralation between Okta and KIM KINDEX
Given the investment horizon of 90 days Okta Inc is expected to generate 1.47 times more return on investment than KIM KINDEX. However, Okta is 1.47 times more volatile than KIM KINDEX 200. It trades about 0.13 of its potential returns per unit of risk. KIM KINDEX 200 is currently generating about -0.12 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. KIM KINDEX 200
Performance |
| Timeline |
| Okta Inc |
| KIM KINDEX 200 |
Okta and KIM KINDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and KIM KINDEX
The main advantage of trading using opposite Okta and KIM KINDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, KIM KINDEX 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 KIM KINDEX will offset losses from the drop in KIM KINDEX's long position.The idea behind Okta Inc and KIM KINDEX 200 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.| KIM KINDEX vs. Busan Industrial Co | KIM KINDEX vs. Busan Ind | KIM KINDEX vs. Mirae Asset Daewoo | KIM KINDEX vs. Shinhan WTI Futures |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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