Correlation Between Okta and Aramis SAS
Can any of the company-specific risk be diversified away by investing in both Okta and Aramis SAS 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 Aramis SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Aramis SAS, you can compare the effects of market volatilities on Okta and Aramis SAS 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 Aramis SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Aramis SAS.
Diversification Opportunities for Okta and Aramis SAS
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Aramis is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Aramis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramis SAS 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 Aramis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramis SAS has no effect on the direction of Okta i.e., Okta and Aramis SAS go up and down completely randomly.
Pair Corralation between Okta and Aramis SAS
Given the investment horizon of 90 days Okta is expected to generate 1.61 times less return on investment than Aramis SAS. But when comparing it to its historical volatility, Okta Inc is 1.19 times less risky than Aramis SAS. It trades about 0.13 of its potential returns per unit of risk. Aramis SAS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Aramis SAS on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Aramis SAS or generate 7.31% 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. Aramis SAS
Performance |
| Timeline |
| Okta Inc |
| Aramis SAS |
Okta and Aramis SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Aramis SAS
The main advantage of trading using opposite Okta and Aramis SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Aramis SAS 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 Aramis SAS will offset losses from the drop in Aramis SAS's long position.The idea behind Okta Inc and Aramis SAS 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.| Aramis SAS vs. Believe SAS | Aramis SAS vs. OVH Groupe SAS | Aramis SAS vs. Derichebourg | Aramis SAS vs. Solutions 30 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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