Correlation Between Okta and Apollo Global
Can any of the company-specific risk be diversified away by investing in both Okta and Apollo Global 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 Apollo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Apollo Global Management, you can compare the effects of market volatilities on Okta and Apollo Global 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 Apollo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Apollo Global.
Diversification Opportunities for Okta and Apollo Global
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Apollo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Apollo Global Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Global Management 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 Apollo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Global Management has no effect on the direction of Okta i.e., Okta and Apollo Global go up and down completely randomly.
Pair Corralation between Okta and Apollo Global
Given the investment horizon of 90 days Okta is expected to generate 2.65 times less return on investment than Apollo Global. In addition to that, Okta is 1.44 times more volatile than Apollo Global Management. It trades about 0.03 of its total potential returns per unit of risk. Apollo Global Management is currently generating about 0.11 per unit of volatility. If you would invest 6,091 in Apollo Global Management on August 27, 2024 and sell it today you would earn a total of 10,665 from holding Apollo Global Management or generate 175.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Apollo Global Management
Performance |
| Timeline |
| Okta Inc |
| Apollo Global Management |
Okta and Apollo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Apollo Global
The main advantage of trading using opposite Okta and Apollo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Apollo Global 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 Apollo Global will offset losses from the drop in Apollo Global's long position.The idea behind Okta Inc and Apollo Global Management 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.| Apollo Global vs. PowerUp Acquisition Corp | Apollo Global vs. Aurora Innovation | Apollo Global vs. HUMANA INC | Apollo Global vs. Aquagold International |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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