Correlation Between Okta and American High
Can any of the company-specific risk be diversified away by investing in both Okta and American High 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 High 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 High Income, you can compare the effects of market volatilities on Okta and American High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and American High.
Diversification Opportunities for Okta and American High
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and American is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and American High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Okta i.e., Okta and American High go up and down completely randomly.
Pair Corralation between Okta and American High
Given the investment horizon of 90 days Okta is expected to generate 1.3 times less return on investment than American High. In addition to that, Okta is 11.21 times more volatile than American High Income. It trades about 0.01 of its total potential returns per unit of risk. American High Income is currently generating about 0.16 per unit of volatility. If you would invest 838.00 in American High Income on August 30, 2024 and sell it today you would earn a total of 148.00 from holding American High Income or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. American High Income
Performance |
| Timeline |
| Okta Inc |
| American High Income |
Okta and American High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and American High
The main advantage of trading using opposite Okta and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, American High 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 High will offset losses from the drop in American High's long position.The idea behind Okta Inc and American High Income 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 High vs. The Hartford Inflation | American High vs. Guidepath Managed Futures | American High vs. Western Asset Inflation | American High vs. Ab Municipal Bond |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |