Correlation Between Okta and Settlebank
Can any of the company-specific risk be diversified away by investing in both Okta and Settlebank 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 Settlebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Settlebank, you can compare the effects of market volatilities on Okta and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Settlebank.
Diversification Opportunities for Okta and Settlebank
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Settlebank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Okta i.e., Okta and Settlebank go up and down completely randomly.
Pair Corralation between Okta and Settlebank
Given the investment horizon of 90 days Okta Inc is expected to generate 0.62 times more return on investment than Settlebank. However, Okta Inc is 1.6 times less risky than Settlebank. It trades about 0.13 of its potential returns per unit of risk. Settlebank is currently generating about 0.0 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% 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. Settlebank
Performance |
| Timeline |
| Okta Inc |
| Settlebank |
Okta and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Settlebank
The main advantage of trading using opposite Okta and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.The idea behind Okta Inc and Settlebank 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.| Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind | Settlebank vs. Mirae Asset Daewoo | Settlebank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |