Correlation Between Okta and Grand Havana
Can any of the company-specific risk be diversified away by investing in both Okta and Grand Havana 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 Grand Havana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Grand Havana, you can compare the effects of market volatilities on Okta and Grand Havana 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 Grand Havana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Grand Havana.
Diversification Opportunities for Okta and Grand Havana
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and Grand is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Grand Havana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Havana 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 Grand Havana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Havana has no effect on the direction of Okta i.e., Okta and Grand Havana go up and down completely randomly.
Pair Corralation between Okta and Grand Havana
Given the investment horizon of 90 days Okta is expected to generate 9.47 times less return on investment than Grand Havana. But when comparing it to its historical volatility, Okta Inc is 5.99 times less risky than Grand Havana. It trades about 0.02 of its potential returns per unit of risk. Grand Havana is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.64 in Grand Havana on August 27, 2024 and sell it today you would lose (0.58) from holding Grand Havana or give up 90.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Grand Havana
Performance |
| Timeline |
| Okta Inc |
| Grand Havana |
Okta and Grand Havana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Grand Havana
The main advantage of trading using opposite Okta and Grand Havana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Grand Havana 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 Grand Havana will offset losses from the drop in Grand Havana's long position.The idea behind Okta Inc and Grand Havana 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.| Grand Havana vs. Right On Brands | Grand Havana vs. BioAdaptives | Grand Havana vs. Yuenglings Ice Cream | Grand Havana vs. Bit Origin |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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