Correlation Between Okta and Desenio Group
Can any of the company-specific risk be diversified away by investing in both Okta and Desenio Group 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 Desenio Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Desenio Group AB, you can compare the effects of market volatilities on Okta and Desenio Group 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 Desenio Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Desenio Group.
Diversification Opportunities for Okta and Desenio Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Desenio is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Desenio Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desenio Group AB 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 Desenio Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desenio Group AB has no effect on the direction of Okta i.e., Okta and Desenio Group go up and down completely randomly.
Pair Corralation between Okta and Desenio Group
Given the investment horizon of 90 days Okta Inc is expected to generate 0.25 times more return on investment than Desenio Group. However, Okta Inc is 3.99 times less risky than Desenio Group. It trades about 0.42 of its potential returns per unit of risk. Desenio Group AB is currently generating about -0.42 per unit of risk. If you would invest 8,546 in Okta Inc on November 9, 2024 and sell it today you would earn a total of 1,201 from holding Okta Inc or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Okta Inc vs. Desenio Group AB
Performance |
| Timeline |
| Okta Inc |
| Desenio Group AB |
Okta and Desenio Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Desenio Group
The main advantage of trading using opposite Okta and Desenio Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Desenio Group 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 Desenio Group will offset losses from the drop in Desenio Group's long position.The idea behind Okta Inc and Desenio Group AB 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.| Desenio Group vs. Rugvista Group AB | Desenio Group vs. Cint Group AB | Desenio Group vs. BHG Group AB | Desenio Group vs. Lyko Group A |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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