Correlation Between Okta and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Okta and COSCO SHIPPING 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 COSCO SHIPPING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and COSCO SHIPPING Development, you can compare the effects of market volatilities on Okta and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and COSCO SHIPPING.
Diversification Opportunities for Okta and COSCO SHIPPING
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and COSCO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Devel has no effect on the direction of Okta i.e., Okta and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Okta and COSCO SHIPPING
Given the investment horizon of 90 days Okta is expected to generate 52.48 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Okta Inc is 7.93 times less risky than COSCO SHIPPING. It trades about 0.01 of its potential returns per unit of risk. COSCO SHIPPING Development is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 14.00 in COSCO SHIPPING Development on August 27, 2024 and sell it today you would lose (3.00) from holding COSCO SHIPPING Development or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 58.46% |
| Values | Daily Returns |
Okta Inc vs. COSCO SHIPPING Development
Performance |
| Timeline |
| Okta Inc |
| COSCO SHIPPING Devel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Okta and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and COSCO SHIPPING
The main advantage of trading using opposite Okta and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.The idea behind Okta Inc and COSCO SHIPPING Development 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.| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. Pacific Basin Shipping |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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