Correlation Between Okta and FD Technologies
Can any of the company-specific risk be diversified away by investing in both Okta and FD Technologies 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 FD Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and FD Technologies PLC, you can compare the effects of market volatilities on Okta and FD Technologies 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 FD Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and FD Technologies.
Diversification Opportunities for Okta and FD Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and GYQ is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and FD Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FD Technologies PLC 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 FD Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FD Technologies PLC has no effect on the direction of Okta i.e., Okta and FD Technologies go up and down completely randomly.
Pair Corralation between Okta and FD Technologies
Given the investment horizon of 90 days Okta Inc is expected to generate 1.2 times more return on investment than FD Technologies. However, Okta is 1.2 times more volatile than FD Technologies PLC. It trades about 0.02 of its potential returns per unit of risk. FD Technologies PLC is currently generating about 0.02 per unit of risk. If you would invest 7,140 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 616.00 from holding Okta Inc or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.15% |
| Values | Daily Returns |
Okta Inc vs. FD Technologies PLC
Performance |
| Timeline |
| Okta Inc |
| FD Technologies PLC |
Okta and FD Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and FD Technologies
The main advantage of trading using opposite Okta and FD Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, FD Technologies 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 FD Technologies will offset losses from the drop in FD Technologies' long position.The idea behind Okta Inc and FD Technologies PLC 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.| FD Technologies vs. Dalata Hotel Group | FD Technologies vs. Uniphar Group PLC | FD Technologies vs. KLP Aksje Fremvoksende | FD Technologies vs. Origin Enterprises Plc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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