Correlation Between Okta and Deutsche Managed
Can any of the company-specific risk be diversified away by investing in both Okta and Deutsche Managed 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 Deutsche Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Deutsche Managed Municipal, you can compare the effects of market volatilities on Okta and Deutsche Managed 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 Deutsche Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Deutsche Managed.
Diversification Opportunities for Okta and Deutsche Managed
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Deutsche is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Deutsche Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Managed Mun 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 Deutsche Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Managed Mun has no effect on the direction of Okta i.e., Okta and Deutsche Managed go up and down completely randomly.
Pair Corralation between Okta and Deutsche Managed
Given the investment horizon of 90 days Okta Inc is expected to generate 10.71 times more return on investment than Deutsche Managed. However, Okta is 10.71 times more volatile than Deutsche Managed Municipal. It trades about 0.03 of its potential returns per unit of risk. Deutsche Managed Municipal is currently generating about 0.08 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Deutsche Managed Municipal
Performance |
| Timeline |
| Okta Inc |
| Deutsche Managed Mun |
Okta and Deutsche Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Deutsche Managed
The main advantage of trading using opposite Okta and Deutsche Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Deutsche Managed 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 Deutsche Managed will offset losses from the drop in Deutsche Managed's long position.The idea behind Okta Inc and Deutsche Managed Municipal 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.| Deutsche Managed vs. Deutsche Gnma Fund | Deutsche Managed vs. Deutsche Short Term Municipal | Deutsche Managed vs. Deutsche Short Term Municipal | Deutsche Managed vs. Deutsche Science And |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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