Correlation Between Okta and Alpha Bank
Can any of the company-specific risk be diversified away by investing in both Okta and Alpha Bank 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 Alpha Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Alpha Bank SA, you can compare the effects of market volatilities on Okta and Alpha Bank 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 Alpha Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Alpha Bank.
Diversification Opportunities for Okta and Alpha Bank
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Okta and Alpha is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Alpha Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Bank SA 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 Alpha Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Bank SA has no effect on the direction of Okta i.e., Okta and Alpha Bank go up and down completely randomly.
Pair Corralation between Okta and Alpha Bank
Given the investment horizon of 90 days Okta Inc is expected to generate 1.78 times more return on investment than Alpha Bank. However, Okta is 1.78 times more volatile than Alpha Bank SA. It trades about 0.14 of its potential returns per unit of risk. Alpha Bank SA is currently generating about 0.21 per unit of risk. If you would invest 8,437 in Okta Inc on December 11, 2024 and sell it today you would earn a total of 2,082 from holding Okta Inc or generate 24.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Alpha Bank SA
Performance |
| Timeline |
| Okta Inc |
| Alpha Bank SA |
Okta and Alpha Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Alpha Bank
The main advantage of trading using opposite Okta and Alpha Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Alpha Bank 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 Alpha Bank will offset losses from the drop in Alpha Bank's long position.The idea behind Okta Inc and Alpha Bank SA 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.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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