Correlation Between Okta and Ichitan Group
Can any of the company-specific risk be diversified away by investing in both Okta and Ichitan Group 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 Ichitan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Ichitan Group Public, you can compare the effects of market volatilities on Okta and Ichitan Group 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 Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Ichitan Group.
Diversification Opportunities for Okta and Ichitan Group
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Okta and Ichitan is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group Public 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 Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of Okta i.e., Okta and Ichitan Group go up and down completely randomly.
Pair Corralation between Okta and Ichitan Group
Given the investment horizon of 90 days Okta is expected to generate 1.07 times less return on investment than Ichitan Group. In addition to that, Okta is 1.39 times more volatile than Ichitan Group Public. It trades about 0.03 of its total potential returns per unit of risk. Ichitan Group Public is currently generating about 0.04 per unit of volatility. If you would invest 1,048 in Ichitan Group Public on August 28, 2024 and sell it today you would earn a total of 422.00 from holding Ichitan Group Public or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.18% |
| Values | Daily Returns |
Okta Inc vs. Ichitan Group Public
Performance |
| Timeline |
| Okta Inc |
| Ichitan Group Public |
Okta and Ichitan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Ichitan Group
The main advantage of trading using opposite Okta and Ichitan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Ichitan Group 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 Ichitan Group will offset losses from the drop in Ichitan Group's long position.The idea behind Okta Inc and Ichitan Group Public 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.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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