Correlation Between Okta and MeguREIT Israel
Can any of the company-specific risk be diversified away by investing in both Okta and MeguREIT Israel 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 MeguREIT Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and MeguREIT Israel, you can compare the effects of market volatilities on Okta and MeguREIT Israel 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 MeguREIT Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and MeguREIT Israel.
Diversification Opportunities for Okta and MeguREIT Israel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and MeguREIT is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and MeguREIT Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeguREIT Israel 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 MeguREIT Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeguREIT Israel has no effect on the direction of Okta i.e., Okta and MeguREIT Israel go up and down completely randomly.
Pair Corralation between Okta and MeguREIT Israel
Given the investment horizon of 90 days Okta Inc is expected to under-perform the MeguREIT Israel. But the stock apears to be less risky and, when comparing its historical volatility, Okta Inc is 1.02 times less risky than MeguREIT Israel. The stock trades about -0.03 of its potential returns per unit of risk. The MeguREIT Israel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 38,252 in MeguREIT Israel on August 29, 2024 and sell it today you would earn a total of 15,748 from holding MeguREIT Israel or generate 41.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 74.4% |
| Values | Daily Returns |
Okta Inc vs. MeguREIT Israel
Performance |
| Timeline |
| Okta Inc |
| MeguREIT Israel |
Okta and MeguREIT Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and MeguREIT Israel
The main advantage of trading using opposite Okta and MeguREIT Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, MeguREIT Israel 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 MeguREIT Israel will offset losses from the drop in MeguREIT Israel's long position.The idea behind Okta Inc and MeguREIT Israel 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.| MeguREIT Israel vs. Nice | MeguREIT Israel vs. The Gold Bond | MeguREIT Israel vs. Bank Leumi Le Israel | MeguREIT Israel vs. ICL Israel Chemicals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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