Correlation Between Okta and Copper Mountain
Can any of the company-specific risk be diversified away by investing in both Okta and Copper Mountain 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 Copper Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Copper Mountain Mining, you can compare the effects of market volatilities on Okta and Copper Mountain 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 Copper Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Copper Mountain.
Diversification Opportunities for Okta and Copper Mountain
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Copper is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Copper Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Mountain Mining 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 Copper Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Mountain Mining has no effect on the direction of Okta i.e., Okta and Copper Mountain go up and down completely randomly.
Pair Corralation between Okta and Copper Mountain
Given the investment horizon of 90 days Okta Inc is expected to generate 0.29 times more return on investment than Copper Mountain. However, Okta Inc is 3.44 times less risky than Copper Mountain. It trades about 0.19 of its potential returns per unit of risk. Copper Mountain Mining is currently generating about -0.3 per unit of risk. If you would invest 7,240 in Okta Inc on August 31, 2024 and sell it today you would earn a total of 516.00 from holding Okta Inc or generate 7.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Copper Mountain Mining
Performance |
| Timeline |
| Okta Inc |
| Copper Mountain Mining |
Okta and Copper Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Copper Mountain
The main advantage of trading using opposite Okta and Copper Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Copper Mountain 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 Copper Mountain will offset losses from the drop in Copper Mountain's long position.The idea behind Okta Inc and Copper Mountain Mining 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.| Copper Mountain vs. South32 Limited | Copper Mountain vs. NioCorp Developments Ltd | Copper Mountain vs. HUMANA INC | Copper Mountain vs. SCOR PK |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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