Correlation Between Okta and Protagenic Therapeutics
Can any of the company-specific risk be diversified away by investing in both Okta and Protagenic Therapeutics 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 Protagenic Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Protagenic Therapeutics, you can compare the effects of market volatilities on Okta and Protagenic Therapeutics 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 Protagenic Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Protagenic Therapeutics.
Diversification Opportunities for Okta and Protagenic Therapeutics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and Protagenic is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics 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 Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Okta i.e., Okta and Protagenic Therapeutics go up and down completely randomly.
Pair Corralation between Okta and Protagenic Therapeutics
Given the investment horizon of 90 days Okta Inc is expected to generate 0.35 times more return on investment than Protagenic Therapeutics. However, Okta Inc is 2.87 times less risky than Protagenic Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Protagenic Therapeutics is currently generating about -0.45 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
Okta Inc vs. Protagenic Therapeutics
Performance |
| Timeline |
| Okta Inc |
| Protagenic Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Okta and Protagenic Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Protagenic Therapeutics
The main advantage of trading using opposite Okta and Protagenic Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Protagenic Therapeutics 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 Protagenic Therapeutics will offset losses from the drop in Protagenic Therapeutics' long position.The idea behind Okta Inc and Protagenic Therapeutics 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.| Protagenic Therapeutics vs. Eliem Therapeutics | Protagenic Therapeutics vs. Scpharmaceuticals | Protagenic Therapeutics vs. Milestone Pharmaceuticals | Protagenic Therapeutics vs. Seres Therapeutics |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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