Correlation Between Okta and Putnam Global
Can any of the company-specific risk be diversified away by investing in both Okta and Putnam Global 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 Putnam Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Putnam Global Industrials, you can compare the effects of market volatilities on Okta and Putnam Global 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 Putnam Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Putnam Global.
Diversification Opportunities for Okta and Putnam Global
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Putnam is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Putnam Global Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Global Industrials 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 Putnam Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Global Industrials has no effect on the direction of Okta i.e., Okta and Putnam Global go up and down completely randomly.
Pair Corralation between Okta and Putnam Global
Given the investment horizon of 90 days Okta is expected to generate 1.25 times less return on investment than Putnam Global. In addition to that, Okta is 3.39 times more volatile than Putnam Global Industrials. It trades about 0.03 of its total potential returns per unit of risk. Putnam Global Industrials is currently generating about 0.11 per unit of volatility. If you would invest 2,346 in Putnam Global Industrials on August 30, 2024 and sell it today you would earn a total of 1,340 from holding Putnam Global Industrials or generate 57.12% 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. Putnam Global Industrials
Performance |
| Timeline |
| Okta Inc |
| Putnam Global Industrials |
Okta and Putnam Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Putnam Global
The main advantage of trading using opposite Okta and Putnam Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Putnam Global 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 Putnam Global will offset losses from the drop in Putnam Global's long position.The idea behind Okta Inc and Putnam Global Industrials 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.| Putnam Global vs. Franklin Moderate Allocation | Putnam Global vs. Pgim Conservative Retirement | Putnam Global vs. Calvert Moderate Allocation | Putnam Global vs. Blackrock Moderate Prepared |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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