Correlation Between Okta and Myers Industries
Can any of the company-specific risk be diversified away by investing in both Okta and Myers Industries 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 Myers Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Myers Industries, you can compare the effects of market volatilities on Okta and Myers Industries 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 Myers Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Myers Industries.
Diversification Opportunities for Okta and Myers Industries
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and Myers is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Okta i.e., Okta and Myers Industries go up and down completely randomly.
Pair Corralation between Okta and Myers Industries
Given the investment horizon of 90 days Okta Inc is expected to generate 0.56 times more return on investment than Myers Industries. However, Okta Inc is 1.79 times less risky than Myers Industries. It trades about 0.15 of its potential returns per unit of risk. Myers Industries is currently generating about -0.06 per unit of risk. If you would invest 7,240 in Okta Inc on August 31, 2024 and sell it today you would earn a total of 402.00 from holding Okta Inc or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Myers Industries
Performance |
| Timeline |
| Okta Inc |
| Myers Industries |
Okta and Myers Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Myers Industries
The main advantage of trading using opposite Okta and Myers Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Myers Industries 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 Myers Industries will offset losses from the drop in Myers Industries' long position.The idea behind Okta Inc and Myers Industries 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.| Myers Industries vs. Greif Bros | Myers Industries vs. Reynolds Consumer Products | Myers Industries vs. Silgan Holdings | Myers Industries vs. O I Glass |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |