Correlation Between Okta and Galaxy Gaming
Can any of the company-specific risk be diversified away by investing in both Okta and Galaxy Gaming 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 Galaxy Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Galaxy Gaming, you can compare the effects of market volatilities on Okta and Galaxy Gaming 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 Galaxy Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Galaxy Gaming.
Diversification Opportunities for Okta and Galaxy Gaming
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and Galaxy is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Galaxy Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Gaming 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 Galaxy Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Gaming has no effect on the direction of Okta i.e., Okta and Galaxy Gaming go up and down completely randomly.
Pair Corralation between Okta and Galaxy Gaming
Given the investment horizon of 90 days Okta is expected to generate 2.25 times less return on investment than Galaxy Gaming. But when comparing it to its historical volatility, Okta Inc is 1.92 times less risky than Galaxy Gaming. It trades about 0.02 of its potential returns per unit of risk. Galaxy Gaming is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Galaxy Gaming on August 28, 2024 and sell it today you would earn a total of 44.00 from holding Galaxy Gaming or generate 19.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Okta Inc vs. Galaxy Gaming
Performance |
| Timeline |
| Okta Inc |
| Galaxy Gaming |
Okta and Galaxy Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Galaxy Gaming
The main advantage of trading using opposite Okta and Galaxy Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Galaxy Gaming 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 Galaxy Gaming will offset losses from the drop in Galaxy Gaming's long position.The idea behind Okta Inc and Galaxy Gaming 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.| Galaxy Gaming vs. Intema Solutions | Galaxy Gaming vs. 888 Holdings | Galaxy Gaming vs. Royal Wins | Galaxy Gaming vs. Real Luck Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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