Correlation Between Okta and HUNTSMAN
Can any of the company-specific risk be diversified away by investing in both Okta and HUNTSMAN 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 HUNTSMAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and HUNTSMAN, you can compare the effects of market volatilities on Okta and HUNTSMAN 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 HUNTSMAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and HUNTSMAN.
Diversification Opportunities for Okta and HUNTSMAN
Weak diversification
The 3 months correlation between Okta and HUNTSMAN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and HUNTSMAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTSMAN 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 HUNTSMAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUNTSMAN has no effect on the direction of Okta i.e., Okta and HUNTSMAN go up and down completely randomly.
Pair Corralation between Okta and HUNTSMAN
Given the investment horizon of 90 days Okta is expected to generate 2.44 times less return on investment than HUNTSMAN. But when comparing it to its historical volatility, Okta Inc is 1.23 times less risky than HUNTSMAN. It trades about 0.02 of its potential returns per unit of risk. HUNTSMAN is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,228 in HUNTSMAN on August 27, 2024 and sell it today you would earn a total of 792.00 from holding HUNTSMAN or generate 35.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
Okta Inc vs. HUNTSMAN
Performance |
| Timeline |
| Okta Inc |
| HUNTSMAN |
Okta and HUNTSMAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and HUNTSMAN
The main advantage of trading using opposite Okta and HUNTSMAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, HUNTSMAN 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 HUNTSMAN will offset losses from the drop in HUNTSMAN's long position.The idea behind Okta Inc and HUNTSMAN 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.| HUNTSMAN vs. SIEM OFFSHORE NEW | HUNTSMAN vs. EIDESVIK OFFSHORE NK | HUNTSMAN vs. MAGNUM MINING EXP | HUNTSMAN vs. MCEWEN MINING INC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |