Correlation Between Okta and Amtran Technology
Can any of the company-specific risk be diversified away by investing in both Okta and Amtran Technology 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 Amtran Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Amtran Technology Co, you can compare the effects of market volatilities on Okta and Amtran Technology 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 Amtran Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Amtran Technology.
Diversification Opportunities for Okta and Amtran Technology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and Amtran is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Amtran Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtran Technology 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 Amtran Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtran Technology has no effect on the direction of Okta i.e., Okta and Amtran Technology go up and down completely randomly.
Pair Corralation between Okta and Amtran Technology
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Amtran Technology. But the stock apears to be less risky and, when comparing its historical volatility, Okta Inc is 1.23 times less risky than Amtran Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Amtran Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,075 in Amtran Technology Co on August 30, 2024 and sell it today you would lose (130.00) from holding Amtran Technology Co or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Amtran Technology Co
Performance |
| Timeline |
| Okta Inc |
| Amtran Technology |
Okta and Amtran Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Amtran Technology
The main advantage of trading using opposite Okta and Amtran Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Amtran Technology 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 Amtran Technology will offset losses from the drop in Amtran Technology's long position.The idea behind Okta Inc and Amtran Technology 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.| Amtran Technology vs. Yulon Finance Corp | Amtran Technology vs. Taiwan Secom Co | Amtran Technology vs. Great Wall Enterprise |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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