Correlation Between Okta and CD Projekt
Can any of the company-specific risk be diversified away by investing in both Okta and CD Projekt 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 CD Projekt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and CD Projekt SA, you can compare the effects of market volatilities on Okta and CD Projekt 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 CD Projekt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and CD Projekt.
Diversification Opportunities for Okta and CD Projekt
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and OTGLF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and CD Projekt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Projekt SA 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 CD Projekt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Projekt SA has no effect on the direction of Okta i.e., Okta and CD Projekt go up and down completely randomly.
Pair Corralation between Okta and CD Projekt
Given the investment horizon of 90 days Okta is expected to generate 1.3 times less return on investment than CD Projekt. In addition to that, Okta is 1.07 times more volatile than CD Projekt SA. It trades about 0.02 of its total potential returns per unit of risk. CD Projekt SA is currently generating about 0.03 per unit of volatility. If you would invest 2,970 in CD Projekt SA on August 31, 2024 and sell it today you would earn a total of 533.00 from holding CD Projekt SA or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Okta Inc vs. CD Projekt SA
Performance |
| Timeline |
| Okta Inc |
| CD Projekt SA |
Okta and CD Projekt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and CD Projekt
The main advantage of trading using opposite Okta and CD Projekt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, CD Projekt 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 CD Projekt will offset losses from the drop in CD Projekt's long position.The idea behind Okta Inc and CD Projekt SA 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.| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Capcom Co Ltd | CD Projekt vs. Embracer Group AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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