Correlation Between Okta and JM Smucker
Can any of the company-specific risk be diversified away by investing in both Okta and JM Smucker 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 JM Smucker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and JM Smucker, you can compare the effects of market volatilities on Okta and JM Smucker 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 JM Smucker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and JM Smucker.
Diversification Opportunities for Okta and JM Smucker
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and SJM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and JM Smucker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JM Smucker 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 JM Smucker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JM Smucker has no effect on the direction of Okta i.e., Okta and JM Smucker go up and down completely randomly.
Pair Corralation between Okta and JM Smucker
Given the investment horizon of 90 days Okta Inc is expected to generate 1.31 times more return on investment than JM Smucker. However, Okta is 1.31 times more volatile than JM Smucker. It trades about 0.13 of its potential returns per unit of risk. JM Smucker is currently generating about -0.02 per unit of risk. If you would invest 7,325 in Okta Inc on August 28, 2024 and sell it today you would earn a total of 325.00 from holding Okta Inc or generate 4.44% 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. JM Smucker
Performance |
| Timeline |
| Okta Inc |
| JM Smucker |
Okta and JM Smucker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and JM Smucker
The main advantage of trading using opposite Okta and JM Smucker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, JM Smucker 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 JM Smucker will offset losses from the drop in JM Smucker's long position.The idea behind Okta Inc and JM Smucker 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.| JM Smucker vs. Bellring Brands LLC | JM Smucker vs. Ingredion Incorporated | JM Smucker vs. Nomad Foods | JM Smucker vs. Simply Good Foods |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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