Correlation Between Okta and Rf Acquisition

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Can any of the company-specific risk be diversified away by investing in both Okta and Rf Acquisition 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 Rf Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Rf Acquisition Corp, you can compare the effects of market volatilities on Okta and Rf Acquisition 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 Rf Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Rf Acquisition.

Diversification Opportunities for Okta and Rf Acquisition

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Okta and RFACU is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Rf Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rf Acquisition Corp 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 Rf Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rf Acquisition Corp has no effect on the direction of Okta i.e., Okta and Rf Acquisition go up and down completely randomly.

Pair Corralation between Okta and Rf Acquisition

Given the investment horizon of 90 days Okta Inc is expected to generate 4.06 times more return on investment than Rf Acquisition. However, Okta is 4.06 times more volatile than Rf Acquisition Corp. It trades about 0.03 of its potential returns per unit of risk. Rf Acquisition Corp is currently generating about 0.04 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 Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Okta Inc  vs.  Rf Acquisition Corp

 Performance 
       Timeline  
Okta Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Okta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Rf Acquisition Corp 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Rf Acquisition Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Rf Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Okta and Rf Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Okta and Rf Acquisition

The main advantage of trading using opposite Okta and Rf Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Rf Acquisition 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 Rf Acquisition will offset losses from the drop in Rf Acquisition's long position.
The idea behind Okta Inc and Rf Acquisition Corp 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.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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