Correlation Between Okta and Meihua International
Can any of the company-specific risk be diversified away by investing in both Okta and Meihua International 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 Meihua International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Meihua International Medical, you can compare the effects of market volatilities on Okta and Meihua International 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 Meihua International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Meihua International.
Diversification Opportunities for Okta and Meihua International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Meihua is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Meihua International Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meihua International 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 Meihua International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meihua International has no effect on the direction of Okta i.e., Okta and Meihua International go up and down completely randomly.
Pair Corralation between Okta and Meihua International
Given the investment horizon of 90 days Okta Inc is expected to generate 0.18 times more return on investment than Meihua International. However, Okta Inc is 5.52 times less risky than Meihua International. It trades about 0.13 of its potential returns per unit of risk. Meihua International Medical is currently generating about -0.07 per unit of risk. If you would invest 7,325 in Okta Inc on August 28, 2024 and sell it today you would earn a total of 325.00 from holding Okta Inc or generate 4.44% 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. Meihua International Medical
Performance |
| Timeline |
| Okta Inc |
| Meihua International |
Okta and Meihua International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Meihua International
The main advantage of trading using opposite Okta and Meihua International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Meihua International 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 Meihua International will offset losses from the drop in Meihua International's long position.The idea behind Okta Inc and Meihua International Medical 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.| Meihua International vs. Heartbeam | Meihua International vs. EUDA Health Holdings | Meihua International vs. Nutex Health | Meihua International vs. Healthcare Triangle |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |