Correlation Between Okta and DecideAct
Can any of the company-specific risk be diversified away by investing in both Okta and DecideAct 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 DecideAct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and DecideAct AS, you can compare the effects of market volatilities on Okta and DecideAct 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 DecideAct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and DecideAct.
Diversification Opportunities for Okta and DecideAct
Modest diversification
The 3 months correlation between Okta and DecideAct is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS 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 DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of Okta i.e., Okta and DecideAct go up and down completely randomly.
Pair Corralation between Okta and DecideAct
Given the investment horizon of 90 days Okta is expected to generate 1.07 times less return on investment than DecideAct. But when comparing it to its historical volatility, Okta Inc is 4.77 times less risky than DecideAct. It trades about 0.22 of its potential returns per unit of risk. DecideAct AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 178.00 in DecideAct AS on September 1, 2024 and sell it today you would earn a total of 4.00 from holding DecideAct AS or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Okta Inc vs. DecideAct AS
Performance |
| Timeline |
| Okta Inc |
| DecideAct AS |
Okta and DecideAct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and DecideAct
The main advantage of trading using opposite Okta and DecideAct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, DecideAct 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 DecideAct will offset losses from the drop in DecideAct's long position.The idea behind Okta Inc and DecideAct AS 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.| DecideAct vs. FOM Technologies AS | DecideAct vs. cBrain AS | DecideAct vs. Green Hydrogen Systems | DecideAct vs. BioPorto |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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