Correlation Between Okta and STAR AFRICA
Can any of the company-specific risk be diversified away by investing in both Okta and STAR AFRICA 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 STAR AFRICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and STAR AFRICA PORATION, you can compare the effects of market volatilities on Okta and STAR AFRICA 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 STAR AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and STAR AFRICA.
Diversification Opportunities for Okta and STAR AFRICA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and STAR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and STAR AFRICA PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR AFRICA PORATION 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 STAR AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR AFRICA PORATION has no effect on the direction of Okta i.e., Okta and STAR AFRICA go up and down completely randomly.
Pair Corralation between Okta and STAR AFRICA
Given the investment horizon of 90 days Okta is expected to generate 11.39 times less return on investment than STAR AFRICA. But when comparing it to its historical volatility, Okta Inc is 3.87 times less risky than STAR AFRICA. It trades about 0.03 of its potential returns per unit of risk. STAR AFRICA PORATION is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 46,170 in STAR AFRICA PORATION on August 27, 2024 and sell it today you would lose (45,929) from holding STAR AFRICA PORATION or give up 99.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.38% |
| Values | Daily Returns |
Okta Inc vs. STAR AFRICA PORATION
Performance |
| Timeline |
| Okta Inc |
| STAR AFRICA PORATION |
Okta and STAR AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and STAR AFRICA
The main advantage of trading using opposite Okta and STAR AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, STAR AFRICA 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 STAR AFRICA will offset losses from the drop in STAR AFRICA's long position.The idea behind Okta Inc and STAR AFRICA PORATION 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.| STAR AFRICA vs. FIRST MUTUAL PROPERTIES | STAR AFRICA vs. Cass Saddle Agriculture | STAR AFRICA vs. RIO ZIM LIMITED | STAR AFRICA vs. Morgan Co Multi |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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