Correlation Between Okta and IMGP DBi
Can any of the company-specific risk be diversified away by investing in both Okta and IMGP DBi 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 IMGP DBi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and iMGP DBi Managed, you can compare the effects of market volatilities on Okta and IMGP DBi 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 IMGP DBi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and IMGP DBi.
Diversification Opportunities for Okta and IMGP DBi
Good diversification
The 3 months correlation between Okta and IMGP is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and iMGP DBi Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMGP DBi Managed 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 IMGP DBi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMGP DBi Managed has no effect on the direction of Okta i.e., Okta and IMGP DBi go up and down completely randomly.
Pair Corralation between Okta and IMGP DBi
Given the investment horizon of 90 days Okta Inc is not expected to generate positive returns. Moreover, Okta is 3.81 times more volatile than iMGP DBi Managed. It trades away all of its potential returns to assume current level of volatility. iMGP DBi Managed is currently generating about 0.04 per unit of risk. If you would invest 2,579 in iMGP DBi Managed on August 28, 2024 and sell it today you would earn a total of 134.00 from holding iMGP DBi Managed or generate 5.2% 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. iMGP DBi Managed
Performance |
| Timeline |
| Okta Inc |
| iMGP DBi Managed |
Okta and IMGP DBi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and IMGP DBi
The main advantage of trading using opposite Okta and IMGP DBi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, IMGP DBi 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 IMGP DBi will offset losses from the drop in IMGP DBi's long position.The idea behind Okta Inc and iMGP DBi Managed 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |