Correlation Between Okta and Burke Herbert
Can any of the company-specific risk be diversified away by investing in both Okta and Burke Herbert 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 Burke Herbert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Burke Herbert Financial, you can compare the effects of market volatilities on Okta and Burke Herbert 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 Burke Herbert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Burke Herbert.
Diversification Opportunities for Okta and Burke Herbert
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Burke is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Burke Herbert Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burke Herbert Financial 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 Burke Herbert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burke Herbert Financial has no effect on the direction of Okta i.e., Okta and Burke Herbert go up and down completely randomly.
Pair Corralation between Okta and Burke Herbert
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Burke Herbert. In addition to that, Okta is 1.02 times more volatile than Burke Herbert Financial. It trades about -0.01 of its total potential returns per unit of risk. Burke Herbert Financial is currently generating about 0.03 per unit of volatility. If you would invest 6,059 in Burke Herbert Financial on August 25, 2024 and sell it today you would earn a total of 810.00 from holding Burke Herbert Financial or generate 13.37% 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. Burke Herbert Financial
Performance |
| Timeline |
| Okta Inc |
| Burke Herbert Financial |
Okta and Burke Herbert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Burke Herbert
The main advantage of trading using opposite Okta and Burke Herbert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Burke Herbert 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 Burke Herbert will offset losses from the drop in Burke Herbert's long position.The idea behind Okta Inc and Burke Herbert Financial 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.| Burke Herbert vs. Private Bancorp of | Burke Herbert vs. Avidbank Holdings | Burke Herbert vs. American Business Bk | Burke Herbert vs. Home Federal Bancorp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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