Correlation Between Okta and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Okta and Compagnie Generale 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 Compagnie Generale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Compagnie Generale des, you can compare the effects of market volatilities on Okta and Compagnie Generale 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 Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Compagnie Generale.
Diversification Opportunities for Okta and Compagnie Generale
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Compagnie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des 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 Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Okta i.e., Okta and Compagnie Generale go up and down completely randomly.
Pair Corralation between Okta and Compagnie Generale
Given the investment horizon of 90 days Okta Inc is expected to generate 2.19 times more return on investment than Compagnie Generale. However, Okta is 2.19 times more volatile than Compagnie Generale des. It trades about 0.02 of its potential returns per unit of risk. Compagnie Generale des is currently generating about 0.01 per unit of risk. If you would invest 7,363 in Okta Inc on August 27, 2024 and sell it today you would earn a total of 294.00 from holding Okta Inc or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Compagnie Generale des
Performance |
| Timeline |
| Okta Inc |
| Compagnie Generale des |
Okta and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Compagnie Generale
The main advantage of trading using opposite Okta and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Compagnie Generale 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 Compagnie Generale will offset losses from the drop in Compagnie Generale's long position.The idea behind Okta Inc and Compagnie Generale des 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.| Compagnie Generale vs. Allison Transmission Holdings | Compagnie Generale vs. Luminar Technologies | Compagnie Generale vs. Lear Corporation | Compagnie Generale vs. BorgWarner |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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