Correlation Between Okta and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Okta and Astoria Investments 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 Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Astoria Investments, you can compare the effects of market volatilities on Okta and Astoria Investments 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 Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Astoria Investments.
Diversification Opportunities for Okta and Astoria Investments
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Astoria is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments 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 Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Okta i.e., Okta and Astoria Investments go up and down completely randomly.
Pair Corralation between Okta and Astoria Investments
Given the investment horizon of 90 days Okta Inc is expected to generate 2.14 times more return on investment than Astoria Investments. However, Okta is 2.14 times more volatile than Astoria Investments. It trades about 0.09 of its potential returns per unit of risk. Astoria Investments is currently generating about -0.12 per unit of risk. If you would invest 8,420 in Okta Inc on January 15, 2025 and sell it today you would earn a total of 1,668 from holding Okta Inc or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Okta Inc vs. Astoria Investments
Performance |
| Timeline |
| Okta Inc |
| Astoria Investments |
Okta and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Astoria Investments
The main advantage of trading using opposite Okta and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Astoria Investments 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.The idea behind Okta Inc and Astoria Investments 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.| Astoria Investments vs. Remgro | Astoria Investments vs. Reinet Investments SCA | Astoria Investments vs. African Rainbow Capital | Astoria Investments vs. Brait SE |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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