Correlation Between Okta and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Okta and Polar Capital 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 Polar Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Polar Capital Emerging, you can compare the effects of market volatilities on Okta and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Polar Capital.
Diversification Opportunities for Okta and Polar Capital
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Polar is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Polar Capital Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Emerging 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Emerging has no effect on the direction of Okta i.e., Okta and Polar Capital go up and down completely randomly.
Pair Corralation between Okta and Polar Capital
Given the investment horizon of 90 days Okta Inc is expected to generate 2.87 times more return on investment than Polar Capital. However, Okta is 2.87 times more volatile than Polar Capital Emerging. It trades about 0.03 of its potential returns per unit of risk. Polar Capital Emerging is currently generating about 0.04 per unit of risk. If you would invest 6,442 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 1,241 from holding Okta Inc or generate 19.26% 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. Polar Capital Emerging
Performance |
| Timeline |
| Okta Inc |
| Polar Capital Emerging |
Okta and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Polar Capital
The main advantage of trading using opposite Okta and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.The idea behind Okta Inc and Polar Capital Emerging 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.| Polar Capital vs. Ms Global Fixed | Polar Capital vs. Rbc Ultra Short Fixed | Polar Capital vs. The Hartford Equity | Polar Capital vs. Ultra Short Fixed Income |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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