Correlation Between Okta and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both Okta and Hoist Finance 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 Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Hoist Finance AB, you can compare the effects of market volatilities on Okta and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Hoist Finance.
Diversification Opportunities for Okta and Hoist Finance
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Hoist is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Okta i.e., Okta and Hoist Finance go up and down completely randomly.
Pair Corralation between Okta and Hoist Finance
Given the investment horizon of 90 days Okta Inc is expected to generate 0.79 times more return on investment than Hoist Finance. However, Okta Inc is 1.26 times less risky than Hoist Finance. It trades about 0.1 of its potential returns per unit of risk. Hoist Finance AB is currently generating about -0.12 per unit of risk. If you would invest 7,381 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 261.00 from holding Okta Inc or generate 3.54% 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. Hoist Finance AB
Performance |
| Timeline |
| Okta Inc |
| Hoist Finance AB |
Okta and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Hoist Finance
The main advantage of trading using opposite Okta and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.The idea behind Okta Inc and Hoist Finance AB 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.| Hoist Finance vs. Intrum Justitia AB | Hoist Finance vs. Inwido AB | Hoist Finance vs. Resurs Holding AB | Hoist Finance vs. Cloetta AB |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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