Correlation Between Okta and YeSUN Tech
Can any of the company-specific risk be diversified away by investing in both Okta and YeSUN Tech 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 YeSUN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and YeSUN Tech CoLtd, you can compare the effects of market volatilities on Okta and YeSUN Tech 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 YeSUN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and YeSUN Tech.
Diversification Opportunities for Okta and YeSUN Tech
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and YeSUN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and YeSUN Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeSUN Tech CoLtd 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 YeSUN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeSUN Tech CoLtd has no effect on the direction of Okta i.e., Okta and YeSUN Tech go up and down completely randomly.
Pair Corralation between Okta and YeSUN Tech
Given the investment horizon of 90 days Okta Inc is expected to generate 0.89 times more return on investment than YeSUN Tech. However, Okta Inc is 1.12 times less risky than YeSUN Tech. It trades about 0.02 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about -0.06 per unit of risk. If you would invest 7,145 in Okta Inc on August 31, 2024 and sell it today you would earn a total of 611.00 from holding Okta Inc or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.06% |
| Values | Daily Returns |
Okta Inc vs. YeSUN Tech CoLtd
Performance |
| Timeline |
| Okta Inc |
| YeSUN Tech CoLtd |
Okta and YeSUN Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and YeSUN Tech
The main advantage of trading using opposite Okta and YeSUN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, YeSUN Tech 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 YeSUN Tech will offset losses from the drop in YeSUN Tech's long position.The idea behind Okta Inc and YeSUN Tech CoLtd 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.| YeSUN Tech vs. Dongil Metal Co | YeSUN Tech vs. Inzi Display CoLtd | YeSUN Tech vs. Playgram Co | YeSUN Tech vs. Kukil Metal 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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