Correlation Between Okta and Belships
Can any of the company-specific risk be diversified away by investing in both Okta and Belships 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 Belships into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Belships, you can compare the effects of market volatilities on Okta and Belships 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 Belships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Belships.
Diversification Opportunities for Okta and Belships
Significant diversification
The 3 months correlation between Okta and Belships is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Belships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belships 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 Belships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belships has no effect on the direction of Okta i.e., Okta and Belships go up and down completely randomly.
Pair Corralation between Okta and Belships
Given the investment horizon of 90 days Okta Inc is expected to generate 0.84 times more return on investment than Belships. However, Okta Inc is 1.18 times less risky than Belships. It trades about 0.13 of its potential returns per unit of risk. Belships is currently generating about -0.04 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Belships
Performance |
| Timeline |
| Okta Inc |
| Belships |
Okta and Belships Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Belships
The main advantage of trading using opposite Okta and Belships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Belships 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 Belships will offset losses from the drop in Belships' long position.The idea behind Okta Inc and Belships 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.| Belships vs. Shelf Drilling | Belships vs. Solstad Offsho | Belships vs. Eidesvik Offshore ASA | Belships vs. Elkem ASA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |