Correlation Between Okta and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Okta and IShares Trust 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 IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and iShares Trust , you can compare the effects of market volatilities on Okta and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and IShares Trust.
Diversification Opportunities for Okta and IShares Trust
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and IShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Okta i.e., Okta and IShares Trust go up and down completely randomly.
Pair Corralation between Okta and IShares Trust
Given the investment horizon of 90 days Okta Inc is expected to under-perform the IShares Trust. In addition to that, Okta is 2.38 times more volatile than iShares Trust . It trades about -0.07 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.13 per unit of volatility. If you would invest 135,414 in iShares Trust on August 27, 2024 and sell it today you would earn a total of 32,686 from holding iShares Trust or generate 24.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
Okta Inc vs. iShares Trust
Performance |
| Timeline |
| Okta Inc |
| iShares Trust |
Okta and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and IShares Trust
The main advantage of trading using opposite Okta and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.The idea behind Okta Inc and iShares Trust 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.| IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Index Funds | IShares Trust vs. Vanguard Tax Managed Funds | IShares Trust vs. Vanguard International Equity |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |