Correlation Between Okta and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Okta and Converge Technology 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 Converge Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Converge Technology Solutions, you can compare the effects of market volatilities on Okta and Converge Technology 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 Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Converge Technology.
Diversification Opportunities for Okta and Converge Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and Converge is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology 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 Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Okta i.e., Okta and Converge Technology go up and down completely randomly.
Pair Corralation between Okta and Converge Technology
Given the investment horizon of 90 days Okta is expected to generate 1.67 times less return on investment than Converge Technology. But when comparing it to its historical volatility, Okta Inc is 1.83 times less risky than Converge Technology. It trades about 0.13 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 315.00 in Converge Technology Solutions on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Converge Technology Solutions or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Converge Technology Solutions
Performance |
| Timeline |
| Okta Inc |
| Converge Technology |
Okta and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Converge Technology
The main advantage of trading using opposite Okta and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.The idea behind Okta Inc and Converge Technology Solutions 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.| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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..
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |