Correlation Between Okta and Green Technology
Can any of the company-specific risk be diversified away by investing in both Okta and Green Technology 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 Green Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Green Technology Metals, you can compare the effects of market volatilities on Okta and Green Technology 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 Green Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Green Technology.
Diversification Opportunities for Okta and Green Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Green is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology Metals 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 Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of Okta i.e., Okta and Green Technology go up and down completely randomly.
Pair Corralation between Okta and Green Technology
Given the investment horizon of 90 days Okta Inc is expected to generate 0.64 times more return on investment than Green Technology. However, Okta Inc is 1.56 times less risky than Green Technology. It trades about 0.22 of its potential returns per unit of risk. Green Technology Metals is currently generating about -0.36 per unit of risk. If you would invest 7,189 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 567.00 from holding Okta Inc or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Okta Inc vs. Green Technology Metals
Performance |
| Timeline |
| Okta Inc |
| Green Technology Metals |
Okta and Green Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Green Technology
The main advantage of trading using opposite Okta and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Green Technology 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 Green Technology will offset losses from the drop in Green Technology's long position.The idea behind Okta Inc and Green Technology Metals 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.| Green Technology vs. Lake Resources NL | Green Technology vs. Arizona Lithium Limited | Green Technology vs. Sayona Mining Limited | Green Technology vs. Argosy Minerals Limited |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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