Correlation Between Okta and Blue Whale
Can any of the company-specific risk be diversified away by investing in both Okta and Blue Whale 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 Blue Whale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Blue Whale Acquisition, you can compare the effects of market volatilities on Okta and Blue Whale 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 Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Blue Whale.
Diversification Opportunities for Okta and Blue Whale
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Okta and Blue is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition 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 Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of Okta i.e., Okta and Blue Whale go up and down completely randomly.
Pair Corralation between Okta and Blue Whale
If you would invest 6,705 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 952.00 from holding Okta Inc or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Okta Inc vs. Blue Whale Acquisition
Performance |
| Timeline |
| Okta Inc |
| Blue Whale Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Okta and Blue Whale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Blue Whale
The main advantage of trading using opposite Okta and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.The idea behind Okta Inc and Blue Whale Acquisition 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.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 Stocks Directory module to find actively traded stocks across global markets.
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