Correlation Between Okta and Cho Thavee
Can any of the company-specific risk be diversified away by investing in both Okta and Cho Thavee 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 Cho Thavee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Cho Thavee Public, you can compare the effects of market volatilities on Okta and Cho Thavee 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 Cho Thavee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Cho Thavee.
Diversification Opportunities for Okta and Cho Thavee
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and Cho is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Cho Thavee Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Thavee Public 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 Cho Thavee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Thavee Public has no effect on the direction of Okta i.e., Okta and Cho Thavee go up and down completely randomly.
Pair Corralation between Okta and Cho Thavee
Given the investment horizon of 90 days Okta Inc is expected to generate 0.15 times more return on investment than Cho Thavee. However, Okta Inc is 6.79 times less risky than Cho Thavee. It trades about 0.13 of its potential returns per unit of risk. Cho Thavee Public is currently generating about -0.03 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 | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Okta Inc vs. Cho Thavee Public
Performance |
| Timeline |
| Okta Inc |
| Cho Thavee Public |
Okta and Cho Thavee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Cho Thavee
The main advantage of trading using opposite Okta and Cho Thavee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Cho Thavee 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 Cho Thavee will offset losses from the drop in Cho Thavee's long position.The idea behind Okta Inc and Cho Thavee Public 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.| Cho Thavee vs. Chewathai Public | Cho Thavee vs. Filter Vision Public | Cho Thavee vs. G Capital Public | Cho Thavee vs. Demco Public |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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