Correlation Between Okta and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Okta and Stampede Drilling 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 Stampede Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Stampede Drilling, you can compare the effects of market volatilities on Okta and Stampede Drilling 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 Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Stampede Drilling.
Diversification Opportunities for Okta and Stampede Drilling
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and Stampede is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling 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 Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of Okta i.e., Okta and Stampede Drilling go up and down completely randomly.
Pair Corralation between Okta and Stampede Drilling
Given the investment horizon of 90 days Okta Inc is expected to generate 0.6 times more return on investment than Stampede Drilling. However, Okta Inc is 1.67 times less risky than Stampede Drilling. It trades about 0.16 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.13 per unit of risk. If you would invest 7,224 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 433.00 from holding Okta Inc or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Stampede Drilling
Performance |
| Timeline |
| Okta Inc |
| Stampede Drilling |
Okta and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Stampede Drilling
The main advantage of trading using opposite Okta and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Stampede Drilling 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.The idea behind Okta Inc and Stampede Drilling 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.| Stampede Drilling vs. STEP Energy Services | Stampede Drilling vs. Southern Energy Corp | Stampede Drilling vs. PHX Energy Services |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |