Correlation Between Okta and Digital Health
Can any of the company-specific risk be diversified away by investing in both Okta and Digital Health 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 Digital Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Digital Health Acquisition, you can compare the effects of market volatilities on Okta and Digital Health 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 Digital Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Digital Health.
Diversification Opportunities for Okta and Digital Health
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Digital is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Digital Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Health Acqui 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 Digital Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Health Acqui has no effect on the direction of Okta i.e., Okta and Digital Health go up and down completely randomly.
Pair Corralation between Okta and Digital Health
Given the investment horizon of 90 days Okta Inc is expected to generate 0.27 times more return on investment than Digital Health. However, Okta Inc is 3.64 times less risky than Digital Health. It trades about -0.04 of its potential returns per unit of risk. Digital Health Acquisition is currently generating about -0.18 per unit of risk. If you would invest 8,868 in Okta Inc on August 29, 2024 and sell it today you would lose (1,226) from holding Okta Inc or give up 13.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.49% |
| Values | Daily Returns |
Okta Inc vs. Digital Health Acquisition
Performance |
| Timeline |
| Okta Inc |
| Digital Health Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Okta and Digital Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Digital Health
The main advantage of trading using opposite Okta and Digital Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Digital Health 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 Digital Health will offset losses from the drop in Digital Health's long position.The idea behind Okta Inc and Digital Health Acquisition 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.| Digital Health vs. Insight Acquisition Corp | Digital Health vs. AlphaVest Acquisition Corp | Digital Health vs. Oak Woods Acquisition | Digital Health vs. Insight Acquisition Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets |