Correlation Between Okta and LIFE Old
Can any of the company-specific risk be diversified away by investing in both Okta and LIFE Old 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 LIFE Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and LIFE Old, you can compare the effects of market volatilities on Okta and LIFE Old 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 LIFE Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and LIFE Old.
Diversification Opportunities for Okta and LIFE Old
Very good diversification
The 3 months correlation between Okta and LIFE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and LIFE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE Old 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 LIFE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE Old has no effect on the direction of Okta i.e., Okta and LIFE Old go up and down completely randomly.
Pair Corralation between Okta and LIFE Old
If you would invest 8,438 in Okta Inc on November 7, 2024 and sell it today you would earn a total of 984.00 from holding Okta Inc or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Okta Inc vs. LIFE Old
Performance |
| Timeline |
| Okta Inc |
| LIFE Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Okta and LIFE Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and LIFE Old
The main advantage of trading using opposite Okta and LIFE Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, LIFE Old 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 LIFE Old will offset losses from the drop in LIFE Old's long position.The idea behind Okta Inc and LIFE Old 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.| LIFE Old vs. Mereo BioPharma Group | LIFE Old vs. Terns Pharmaceuticals | LIFE Old vs. PDS Biotechnology Corp | LIFE Old vs. Inozyme Pharma |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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