Correlation Between Okta and Standpoint Multi
Can any of the company-specific risk be diversified away by investing in both Okta and Standpoint Multi 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 Standpoint Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Standpoint Multi Asset, you can compare the effects of market volatilities on Okta and Standpoint Multi 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 Standpoint Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Standpoint Multi.
Diversification Opportunities for Okta and Standpoint Multi
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Okta and Standpoint is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Standpoint Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standpoint Multi Asset 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 Standpoint Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standpoint Multi Asset has no effect on the direction of Okta i.e., Okta and Standpoint Multi go up and down completely randomly.
Pair Corralation between Okta and Standpoint Multi
Given the investment horizon of 90 days Okta Inc is expected to generate 4.45 times more return on investment than Standpoint Multi. However, Okta is 4.45 times more volatile than Standpoint Multi Asset. It trades about 0.03 of its potential returns per unit of risk. Standpoint Multi Asset is currently generating about 0.06 per unit of risk. If you would invest 6,194 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 1,463 from holding Okta Inc or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Standpoint Multi Asset
Performance |
| Timeline |
| Okta Inc |
| Standpoint Multi Asset |
Okta and Standpoint Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Standpoint Multi
The main advantage of trading using opposite Okta and Standpoint Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Standpoint Multi 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 Standpoint Multi will offset losses from the drop in Standpoint Multi's long position.The idea behind Okta Inc and Standpoint Multi Asset 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.| Standpoint Multi vs. Standpoint Multi Asset | Standpoint Multi vs. Vanguard 500 Index | Standpoint Multi vs. Vanguard Materials Index | Standpoint Multi vs. Nasdaq 100 2x Strategy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |