Correlation Between Okta and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Okta and Kinross Gold 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 Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Kinross Gold Corp, you can compare the effects of market volatilities on Okta and Kinross Gold 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 Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Kinross Gold.
Diversification Opportunities for Okta and Kinross Gold
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Kinross is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Kinross Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold Corp 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 Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold Corp has no effect on the direction of Okta i.e., Okta and Kinross Gold go up and down completely randomly.
Pair Corralation between Okta and Kinross Gold
Given the investment horizon of 90 days Okta is expected to generate 2.41 times less return on investment than Kinross Gold. In addition to that, Okta is 1.28 times more volatile than Kinross Gold Corp. It trades about 0.03 of its total potential returns per unit of risk. Kinross Gold Corp is currently generating about 0.09 per unit of volatility. If you would invest 562.00 in Kinross Gold Corp on August 28, 2024 and sell it today you would earn a total of 808.00 from holding Kinross Gold Corp or generate 143.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Okta Inc vs. Kinross Gold Corp
Performance |
| Timeline |
| Okta Inc |
| Kinross Gold Corp |
Okta and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Kinross Gold
The main advantage of trading using opposite Okta and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Kinross Gold 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 Kinross Gold will offset losses from the drop in Kinross Gold's long position.The idea behind Okta Inc and Kinross Gold Corp 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.| Kinross Gold vs. Barrick Gold Corp | Kinross Gold vs. Eldorado Gold Corp | Kinross Gold vs. IAMGold | Kinross Gold vs. Agnico Eagle Mines |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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