Correlation Between Okta and American Beacon
Can any of the company-specific risk be diversified away by investing in both Okta and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and American Beacon Ark, you can compare the effects of market volatilities on Okta and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and American Beacon.
Diversification Opportunities for Okta and American Beacon
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and American is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and American Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ark 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Ark has no effect on the direction of Okta i.e., Okta and American Beacon go up and down completely randomly.
Pair Corralation between Okta and American Beacon
If you would invest 7,381 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 261.00 from holding Okta Inc or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Okta Inc vs. American Beacon Ark
Performance |
| Timeline |
| Okta Inc |
| American Beacon Ark |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Okta and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and American Beacon
The main advantage of trading using opposite Okta and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.The idea behind Okta Inc and American Beacon Ark 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.| American Beacon vs. Amer Beacon Ark | American Beacon vs. Amer Beacon Ark | American Beacon vs. American Beacon Large | American Beacon vs. Amer Beacon Ark |
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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