Correlation Between Okta and Matthews Asia
Can any of the company-specific risk be diversified away by investing in both Okta and Matthews Asia 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 Matthews Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Matthews Asia Dividend, you can compare the effects of market volatilities on Okta and Matthews Asia 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 Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Matthews Asia.
Diversification Opportunities for Okta and Matthews Asia
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Matthews is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Matthews Asia Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Asia Dividend 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 Matthews Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Asia Dividend has no effect on the direction of Okta i.e., Okta and Matthews Asia go up and down completely randomly.
Pair Corralation between Okta and Matthews Asia
Given the investment horizon of 90 days Okta Inc is expected to generate 1.81 times more return on investment than Matthews Asia. However, Okta is 1.81 times more volatile than Matthews Asia Dividend. It trades about 0.02 of its potential returns per unit of risk. Matthews Asia Dividend is currently generating about -0.13 per unit of risk. If you would invest 7,583 in Okta Inc on August 25, 2024 and sell it today you would earn a total of 74.00 from holding Okta Inc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Matthews Asia Dividend
Performance |
| Timeline |
| Okta Inc |
| Matthews Asia Dividend |
Okta and Matthews Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Matthews Asia
The main advantage of trading using opposite Okta and Matthews Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Matthews Asia 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 Matthews Asia will offset losses from the drop in Matthews Asia's long position.The idea behind Okta Inc and Matthews Asia Dividend 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.| Matthews Asia vs. Matthews Pacific Tiger | Matthews Asia vs. Sit Dividend Growth | Matthews Asia vs. Harbor Vertible Securities | Matthews Asia vs. Jpmorgan Unconstrained Debt |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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