Correlation Between Okta and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both Okta and Picton Mahoney 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 Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Picton Mahoney Fortified, you can compare the effects of market volatilities on Okta and Picton Mahoney 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 Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Picton Mahoney.
Diversification Opportunities for Okta and Picton Mahoney
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Picton is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified 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 Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of Okta i.e., Okta and Picton Mahoney go up and down completely randomly.
Pair Corralation between Okta and Picton Mahoney
Given the investment horizon of 90 days Okta Inc is expected to generate 1.63 times more return on investment than Picton Mahoney. However, Okta is 1.63 times more volatile than Picton Mahoney Fortified. It trades about 0.22 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.3 per unit of risk. If you would invest 7,189 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 567.00 from holding Okta Inc or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Okta Inc vs. Picton Mahoney Fortified
Performance |
| Timeline |
| Okta Inc |
| Picton Mahoney Fortified |
Okta and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Picton Mahoney
The main advantage of trading using opposite Okta and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.The idea behind Okta Inc and Picton Mahoney Fortified 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.| Picton Mahoney vs. Brompton Global Dividend | Picton Mahoney vs. Global Healthcare Income | Picton Mahoney vs. Tech Leaders Income | Picton Mahoney vs. Brompton North American |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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