Correlation Between Okta and Ennogie Solar
Can any of the company-specific risk be diversified away by investing in both Okta and Ennogie Solar 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 Ennogie Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Ennogie Solar Group, you can compare the effects of market volatilities on Okta and Ennogie Solar 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 Ennogie Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Ennogie Solar.
Diversification Opportunities for Okta and Ennogie Solar
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Ennogie is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Ennogie Solar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennogie Solar Group 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 Ennogie Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennogie Solar Group has no effect on the direction of Okta i.e., Okta and Ennogie Solar go up and down completely randomly.
Pair Corralation between Okta and Ennogie Solar
Given the investment horizon of 90 days Okta Inc is expected to generate 0.78 times more return on investment than Ennogie Solar. However, Okta Inc is 1.28 times less risky than Ennogie Solar. It trades about 0.03 of its potential returns per unit of risk. Ennogie Solar Group is currently generating about -0.05 per unit of risk. If you would invest 6,382 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 1,260 from holding Okta Inc or generate 19.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Ennogie Solar Group
Performance |
| Timeline |
| Okta Inc |
| Ennogie Solar Group |
Okta and Ennogie Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Ennogie Solar
The main advantage of trading using opposite Okta and Ennogie Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Ennogie Solar 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 Ennogie Solar will offset losses from the drop in Ennogie Solar's long position.The idea behind Okta Inc and Ennogie Solar Group 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.| Ennogie Solar vs. Green Hydrogen Systems | Ennogie Solar vs. ALK Abell AS | Ennogie Solar vs. H Lundbeck AS | Ennogie Solar vs. TORM plc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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