Correlation Between Okta and Senao International
Can any of the company-specific risk be diversified away by investing in both Okta and Senao International 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 Senao International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Senao International Co, you can compare the effects of market volatilities on Okta and Senao International 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 Senao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Senao International.
Diversification Opportunities for Okta and Senao International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and Senao is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Senao International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao International 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 Senao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao International has no effect on the direction of Okta i.e., Okta and Senao International go up and down completely randomly.
Pair Corralation between Okta and Senao International
Given the investment horizon of 90 days Okta Inc is expected to generate 3.68 times more return on investment than Senao International. However, Okta is 3.68 times more volatile than Senao International Co. It trades about 0.04 of its potential returns per unit of risk. Senao International Co is currently generating about -0.08 per unit of risk. If you would invest 7,486 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 171.00 from holding Okta Inc or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Okta Inc vs. Senao International Co
Performance |
| Timeline |
| Okta Inc |
| Senao International |
Okta and Senao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Senao International
The main advantage of trading using opposite Okta and Senao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Senao International 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 Senao International will offset losses from the drop in Senao International's long position.The idea behind Okta Inc and Senao International 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.| Senao International vs. Taiwan Semiconductor Manufacturing | Senao International vs. Hon Hai Precision | Senao International vs. MediaTek | Senao International vs. Chunghwa Telecom 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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