Correlation Between Okta and SPDR Global
Can any of the company-specific risk be diversified away by investing in both Okta and SPDR Global 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 SPDR Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and SPDR Global Dow, you can compare the effects of market volatilities on Okta and SPDR Global 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 SPDR Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and SPDR Global.
Diversification Opportunities for Okta and SPDR Global
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and SPDR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and SPDR Global Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Global Dow 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 SPDR Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Global Dow has no effect on the direction of Okta i.e., Okta and SPDR Global go up and down completely randomly.
Pair Corralation between Okta and SPDR Global
Given the investment horizon of 90 days Okta Inc is expected to generate 3.04 times more return on investment than SPDR Global. However, Okta is 3.04 times more volatile than SPDR Global Dow. It trades about 0.1 of its potential returns per unit of risk. SPDR Global Dow is currently generating about 0.05 per unit of risk. If you would invest 7,381 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 261.00 from holding Okta Inc or generate 3.54% 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. SPDR Global Dow
Performance |
| Timeline |
| Okta Inc |
| SPDR Global Dow |
Okta and SPDR Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and SPDR Global
The main advantage of trading using opposite Okta and SPDR Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, SPDR Global 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 SPDR Global will offset losses from the drop in SPDR Global's long position.The idea behind Okta Inc and SPDR Global Dow 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.| SPDR Global vs. iShares Global 100 | SPDR Global vs. iShares MSCI Belgium | SPDR Global vs. iShares MSCI Netherlands | SPDR Global vs. iShares Dow Jones |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |