Correlation Between Okta and John Hancock
Can any of the company-specific risk be diversified away by investing in both Okta and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and John Hancock Preferred, you can compare the effects of market volatilities on Okta and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and John Hancock.
Diversification Opportunities for Okta and John Hancock
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and John is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Preferred has no effect on the direction of Okta i.e., Okta and John Hancock go up and down completely randomly.
Pair Corralation between Okta and John Hancock
Given the investment horizon of 90 days Okta is expected to generate 1.41 times less return on investment than John Hancock. In addition to that, Okta is 2.8 times more volatile than John Hancock Preferred. It trades about 0.02 of its total potential returns per unit of risk. John Hancock Preferred is currently generating about 0.09 per unit of volatility. If you would invest 1,316 in John Hancock Preferred on August 31, 2024 and sell it today you would earn a total of 449.00 from holding John Hancock Preferred or generate 34.12% 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. John Hancock Preferred
Performance |
| Timeline |
| Okta Inc |
| John Hancock Preferred |
Okta and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and John Hancock
The main advantage of trading using opposite Okta and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.The idea behind Okta Inc and John Hancock Preferred 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.| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. John Hancock Tax |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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