Correlation Between Okta and Amplify ETF
Can any of the company-specific risk be diversified away by investing in both Okta and Amplify ETF 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 Amplify ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Amplify ETF Trust, you can compare the effects of market volatilities on Okta and Amplify ETF 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 Amplify ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Amplify ETF.
Diversification Opportunities for Okta and Amplify ETF
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Amplify is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify ETF Trust 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 Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of Okta i.e., Okta and Amplify ETF go up and down completely randomly.
Pair Corralation between Okta and Amplify ETF
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Amplify ETF. But the stock apears to be less risky and, when comparing its historical volatility, Okta Inc is 1.79 times less risky than Amplify ETF. The stock trades about -0.07 of its potential returns per unit of risk. The Amplify ETF Trust is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Amplify ETF Trust on August 27, 2024 and sell it today you would lose (62.00) from holding Amplify ETF Trust or give up 19.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Amplify ETF Trust
Performance |
| Timeline |
| Okta Inc |
| Amplify ETF Trust |
Okta and Amplify ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Amplify ETF
The main advantage of trading using opposite Okta and Amplify ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Amplify ETF 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 Amplify ETF will offset losses from the drop in Amplify ETF's long position.The idea behind Okta Inc and Amplify ETF Trust 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.| Amplify ETF vs. SPDR Kensho New | Amplify ETF vs. Global X FinTech | Amplify ETF vs. iShares Genomics Immunology | Amplify ETF vs. Aquagold International |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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