Correlation Between Okta and First Quantum
Can any of the company-specific risk be diversified away by investing in both Okta and First Quantum 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 First Quantum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and First Quantum Minerals, you can compare the effects of market volatilities on Okta and First Quantum 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 First Quantum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and First Quantum.
Diversification Opportunities for Okta and First Quantum
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and First is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of Okta i.e., Okta and First Quantum go up and down completely randomly.
Pair Corralation between Okta and First Quantum
Given the investment horizon of 90 days Okta Inc is expected to generate 0.56 times more return on investment than First Quantum. However, Okta Inc is 1.77 times less risky than First Quantum. It trades about 0.13 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.03 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% 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. First Quantum Minerals
Performance |
| Timeline |
| Okta Inc |
| First Quantum Minerals |
Okta and First Quantum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and First Quantum
The main advantage of trading using opposite Okta and First Quantum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, First Quantum 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 First Quantum will offset losses from the drop in First Quantum's long position.The idea behind Okta Inc and First Quantum Minerals 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.| First Quantum vs. Lundin Mining | First Quantum vs. HudBay Minerals | First Quantum vs. Teck Resources Limited | First Quantum vs. Ivanhoe Mines |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |