Correlation Between Okta and Neptune Wellness
Can any of the company-specific risk be diversified away by investing in both Okta and Neptune Wellness 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 Neptune Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Neptune Wellness Solutions, you can compare the effects of market volatilities on Okta and Neptune Wellness 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 Neptune Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Neptune Wellness.
Diversification Opportunities for Okta and Neptune Wellness
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and Neptune is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Neptune Wellness Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Wellness Sol 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 Neptune Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Wellness Sol has no effect on the direction of Okta i.e., Okta and Neptune Wellness go up and down completely randomly.
Pair Corralation between Okta and Neptune Wellness
If you would invest 6,705 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 952.00 from holding Okta Inc or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Okta Inc vs. Neptune Wellness Solutions
Performance |
| Timeline |
| Okta Inc |
| Neptune Wellness Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Okta and Neptune Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Neptune Wellness
The main advantage of trading using opposite Okta and Neptune Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Neptune Wellness 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 Neptune Wellness will offset losses from the drop in Neptune Wellness' long position.The idea behind Okta Inc and Neptune Wellness Solutions 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.| Neptune Wellness vs. Alpha Teknova | Neptune Wellness vs. Phibro Animal Health | Neptune Wellness vs. China Pharma Holdings | Neptune Wellness vs. Universe Pharmaceuticals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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