Correlation Between Okta and INC Research
Can any of the company-specific risk be diversified away by investing in both Okta and INC Research 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 INC Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and INC Research Holdings, you can compare the effects of market volatilities on Okta and INC Research 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 INC Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and INC Research.
Diversification Opportunities for Okta and INC Research
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and INC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and INC Research Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INC Research Holdings 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 INC Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INC Research Holdings has no effect on the direction of Okta i.e., Okta and INC Research go up and down completely randomly.
Pair Corralation between Okta and INC Research
Given the investment horizon of 90 days Okta Inc is expected to generate 0.28 times more return on investment than INC Research. However, Okta Inc is 3.57 times less risky than INC Research. It trades about 0.12 of its potential returns per unit of risk. INC Research Holdings is currently generating about -0.17 per unit of risk. If you would invest 7,216 in Okta Inc on August 24, 2024 and sell it today you would earn a total of 329.00 from holding Okta Inc or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. INC Research Holdings
Performance |
| Timeline |
| Okta Inc |
| INC Research Holdings |
Okta and INC Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and INC Research
The main advantage of trading using opposite Okta and INC Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, INC Research 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 INC Research will offset losses from the drop in INC Research's long position.The idea behind Okta Inc and INC Research Holdings 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.| INC Research vs. AYR Strategies Class | INC Research vs. Verano Holdings Corp | INC Research vs. TILT Holdings | INC Research vs. Lowell Farms |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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