Correlation Between Okta and Lundin Gold
Can any of the company-specific risk be diversified away by investing in both Okta and Lundin 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 Lundin 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 Lundin Gold, you can compare the effects of market volatilities on Okta and Lundin 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 Lundin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Lundin Gold.
Diversification Opportunities for Okta and Lundin Gold
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Lundin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Lundin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Gold 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 Lundin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Gold has no effect on the direction of Okta i.e., Okta and Lundin Gold go up and down completely randomly.
Pair Corralation between Okta and Lundin Gold
Given the investment horizon of 90 days Okta Inc is expected to generate 0.6 times more return on investment than Lundin Gold. However, Okta Inc is 1.68 times less risky than Lundin Gold. It trades about 0.22 of its potential returns per unit of risk. Lundin Gold is currently generating about -0.02 per unit of risk. If you would invest 7,189 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 567.00 from holding Okta Inc or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Okta Inc vs. Lundin Gold
Performance |
| Timeline |
| Okta Inc |
| Lundin Gold |
Okta and Lundin Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Lundin Gold
The main advantage of trading using opposite Okta and Lundin Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Lundin 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 Lundin Gold will offset losses from the drop in Lundin Gold's long position.The idea behind Okta Inc and Lundin Gold 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.| Lundin Gold vs. Lundin Mining | Lundin Gold vs. Africa Oil Corp | Lundin Gold vs. International Petroleum | Lundin Gold vs. Boliden AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |