Correlation Between Okta and Immatics Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Okta and Immatics Biotechnologies 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 Immatics Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and immatics biotechnologies GmbH, you can compare the effects of market volatilities on Okta and Immatics Biotechnologies 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 Immatics Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Immatics Biotechnologies.
Diversification Opportunities for Okta and Immatics Biotechnologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Immatics is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and immatics biotechnologies GmbH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics Biotechnologies 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 Immatics Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics Biotechnologies has no effect on the direction of Okta i.e., Okta and Immatics Biotechnologies go up and down completely randomly.
Pair Corralation between Okta and Immatics Biotechnologies
Given the investment horizon of 90 days Okta Inc is expected to generate 0.18 times more return on investment than Immatics Biotechnologies. However, Okta Inc is 5.55 times less risky than Immatics Biotechnologies. It trades about 0.16 of its potential returns per unit of risk. immatics biotechnologies GmbH is currently generating about -0.53 per unit of risk. If you would invest 7,215 in Okta Inc on August 25, 2024 and sell it today you would earn a total of 442.00 from holding Okta Inc or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Okta Inc vs. immatics biotechnologies GmbH
Performance |
| Timeline |
| Okta Inc |
| Immatics Biotechnologies |
Okta and Immatics Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Immatics Biotechnologies
The main advantage of trading using opposite Okta and Immatics Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Immatics Biotechnologies 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 Immatics Biotechnologies will offset losses from the drop in Immatics Biotechnologies' long position.The idea behind Okta Inc and immatics biotechnologies GmbH 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |