Correlation Between Okta and JE Cleantech
Can any of the company-specific risk be diversified away by investing in both Okta and JE Cleantech 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 JE Cleantech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and JE Cleantech Holdings, you can compare the effects of market volatilities on Okta and JE Cleantech 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 JE Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and JE Cleantech.
Diversification Opportunities for Okta and JE Cleantech
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and JCSE is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and JE Cleantech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JE Cleantech 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 JE Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JE Cleantech Holdings has no effect on the direction of Okta i.e., Okta and JE Cleantech go up and down completely randomly.
Pair Corralation between Okta and JE Cleantech
Given the investment horizon of 90 days Okta is expected to generate 4.21 times less return on investment than JE Cleantech. But when comparing it to its historical volatility, Okta Inc is 3.32 times less risky than JE Cleantech. It trades about 0.02 of its potential returns per unit of risk. JE Cleantech Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 183.00 in JE Cleantech Holdings on August 31, 2024 and sell it today you would lose (64.00) from holding JE Cleantech Holdings or give up 34.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Okta Inc vs. JE Cleantech Holdings
Performance |
| Timeline |
| Okta Inc |
| JE Cleantech Holdings |
Okta and JE Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and JE Cleantech
The main advantage of trading using opposite Okta and JE Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, JE Cleantech 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 JE Cleantech will offset losses from the drop in JE Cleantech's long position.The idea behind Okta Inc and JE Cleantech 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.| JE Cleantech vs. IDEX Corporation | JE Cleantech vs. Watts Water Technologies | JE Cleantech vs. Donaldson | JE Cleantech vs. Gorman Rupp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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