Correlation Between Okta and FIH Mobile
Can any of the company-specific risk be diversified away by investing in both Okta and FIH Mobile 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 FIH Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and FIH Mobile Limited, you can compare the effects of market volatilities on Okta and FIH Mobile 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 FIH Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and FIH Mobile.
Diversification Opportunities for Okta and FIH Mobile
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and FIH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and FIH Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH Mobile Limited 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 FIH Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH Mobile Limited has no effect on the direction of Okta i.e., Okta and FIH Mobile go up and down completely randomly.
Pair Corralation between Okta and FIH Mobile
Given the investment horizon of 90 days Okta Inc is expected to generate 0.33 times more return on investment than FIH Mobile. However, Okta Inc is 3.01 times less risky than FIH Mobile. It trades about 0.05 of its potential returns per unit of risk. FIH Mobile Limited is currently generating about -0.05 per unit of risk. If you would invest 7,434 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 249.00 from holding Okta Inc or generate 3.35% 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. FIH Mobile Limited
Performance |
| Timeline |
| Okta Inc |
| FIH Mobile Limited |
Okta and FIH Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and FIH Mobile
The main advantage of trading using opposite Okta and FIH Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, FIH Mobile 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 FIH Mobile will offset losses from the drop in FIH Mobile's long position.The idea behind Okta Inc and FIH Mobile Limited 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.| FIH Mobile vs. WESTLAKE CHEMICAL | FIH Mobile vs. MARKET VECTR RETAIL | FIH Mobile vs. JIAHUA STORES | FIH Mobile vs. Westlake Chemical |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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