Correlation Between Okta and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Okta and Nuveen New 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 Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Nuveen New York, you can compare the effects of market volatilities on Okta and Nuveen New 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 Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Nuveen New.
Diversification Opportunities for Okta and Nuveen New
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Nuveen is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Okta i.e., Okta and Nuveen New go up and down completely randomly.
Pair Corralation between Okta and Nuveen New
Given the investment horizon of 90 days Okta Inc is expected to generate 2.87 times more return on investment than Nuveen New. However, Okta is 2.87 times more volatile than Nuveen New York. It trades about 0.15 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.25 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Nuveen New York
Performance |
| Timeline |
| Okta Inc |
| Nuveen New York |
Okta and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Nuveen New
The main advantage of trading using opposite Okta and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Nuveen New 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 Nuveen New will offset losses from the drop in Nuveen New's long position.The idea behind Okta Inc and Nuveen New York 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.| Nuveen New vs. MFS Investment Grade | Nuveen New vs. Invesco High Income | Nuveen New vs. Eaton Vance National | Nuveen New vs. Federated Premier Municipal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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