Correlation Between Okta and Sit International
Can any of the company-specific risk be diversified away by investing in both Okta and Sit International 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 Sit International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Sit International Equity, you can compare the effects of market volatilities on Okta and Sit International 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 Sit International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Sit International.
Diversification Opportunities for Okta and Sit International
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Sit is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Sit International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit International Equity 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 Sit International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit International Equity has no effect on the direction of Okta i.e., Okta and Sit International go up and down completely randomly.
Pair Corralation between Okta and Sit International
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Sit International. In addition to that, Okta is 3.7 times more volatile than Sit International Equity. It trades about 0.0 of its total potential returns per unit of risk. Sit International Equity is currently generating about 0.06 per unit of volatility. If you would invest 1,095 in Sit International Equity on August 29, 2024 and sell it today you would earn a total of 152.00 from holding Sit International Equity or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Sit International Equity
Performance |
| Timeline |
| Okta Inc |
| Sit International Equity |
Okta and Sit International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Sit International
The main advantage of trading using opposite Okta and Sit International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Sit International 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 Sit International will offset losses from the drop in Sit International's long position.The idea behind Okta Inc and Sit International Equity 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.| Sit International vs. Sit Emerging Markets | Sit International vs. Simt E Fixed | Sit International vs. Simt Multi Asset Income | Sit International vs. Simt Global Managed |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |