Correlation Between Okta and Hang Lung
Can any of the company-specific risk be diversified away by investing in both Okta and Hang Lung 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 Hang Lung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Hang Lung Properties, you can compare the effects of market volatilities on Okta and Hang Lung 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 Hang Lung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Hang Lung.
Diversification Opportunities for Okta and Hang Lung
Very good diversification
The 3 months correlation between Okta and Hang is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Hang Lung Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Lung Properties 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 Hang Lung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Lung Properties has no effect on the direction of Okta i.e., Okta and Hang Lung go up and down completely randomly.
Pair Corralation between Okta and Hang Lung
Given the investment horizon of 90 days Okta Inc is expected to generate 0.8 times more return on investment than Hang Lung. However, Okta Inc is 1.25 times less risky than Hang Lung. It trades about 0.13 of its potential returns per unit of risk. Hang Lung Properties is currently generating about -0.18 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Hang Lung Properties
Performance |
| Timeline |
| Okta Inc |
| Hang Lung Properties |
Okta and Hang Lung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Hang Lung
The main advantage of trading using opposite Okta and Hang Lung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Hang Lung 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 Hang Lung will offset losses from the drop in Hang Lung's long position.The idea behind Okta Inc and Hang Lung Properties 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.| Hang Lung vs. Ascendas India Trust | Hang Lung vs. Asia Pptys | Hang Lung vs. Adler Group SA | Hang Lung vs. Aztec Land Comb |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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