Correlation Between Okta and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Okta and Grid Metals 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 Grid Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Grid Metals Corp, you can compare the effects of market volatilities on Okta and Grid Metals 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 Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Grid Metals.
Diversification Opportunities for Okta and Grid Metals
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Grid is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp 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 Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of Okta i.e., Okta and Grid Metals go up and down completely randomly.
Pair Corralation between Okta and Grid Metals
Given the investment horizon of 90 days Okta Inc is expected to generate 0.27 times more return on investment than Grid Metals. However, Okta Inc is 3.74 times less risky than Grid Metals. It trades about 0.13 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.29 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 Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Okta Inc vs. Grid Metals Corp
Performance |
| Timeline |
| Okta Inc |
| Grid Metals Corp |
Okta and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Grid Metals
The main advantage of trading using opposite Okta and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Grid Metals 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 Grid Metals will offset losses from the drop in Grid Metals' long position.The idea behind Okta Inc and Grid Metals Corp 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.| Grid Metals vs. Stillwater Critical Minerals | Grid Metals vs. Gungnir Resources | Grid Metals vs. Golden Pursuit Resources | Grid Metals vs. New Age Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |