Correlation Between Okta and Opter AB
Can any of the company-specific risk be diversified away by investing in both Okta and Opter AB 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 Opter AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Opter AB, you can compare the effects of market volatilities on Okta and Opter AB 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 Opter AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Opter AB.
Diversification Opportunities for Okta and Opter AB
Very good diversification
The 3 months correlation between Okta and Opter is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Opter AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opter AB 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 Opter AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opter AB has no effect on the direction of Okta i.e., Okta and Opter AB go up and down completely randomly.
Pair Corralation between Okta and Opter AB
Given the investment horizon of 90 days Okta is expected to generate 1.85 times less return on investment than Opter AB. But when comparing it to its historical volatility, Okta Inc is 1.2 times less risky than Opter AB. It trades about 0.16 of its potential returns per unit of risk. Opter AB is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10,600 in Opter AB on August 25, 2024 and sell it today you would earn a total of 1,250 from holding Opter AB or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Opter AB
Performance |
| Timeline |
| Okta Inc |
| Opter AB |
Okta and Opter AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Opter AB
The main advantage of trading using opposite Okta and Opter AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Opter AB 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 Opter AB will offset losses from the drop in Opter AB's long position.The idea behind Okta Inc and Opter AB 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.| Opter AB vs. Kjell Group AB | Opter AB vs. Upsales Technology AB | Opter AB vs. Avensia publ AB | Opter AB vs. Generic Sweden publ |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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