Correlation Between Okta and SPC Nickel
Can any of the company-specific risk be diversified away by investing in both Okta and SPC Nickel 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 SPC Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and SPC Nickel Corp, you can compare the effects of market volatilities on Okta and SPC Nickel 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 SPC Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and SPC Nickel.
Diversification Opportunities for Okta and SPC Nickel
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and SPC is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and SPC Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPC Nickel Corp 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 SPC Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPC Nickel Corp has no effect on the direction of Okta i.e., Okta and SPC Nickel go up and down completely randomly.
Pair Corralation between Okta and SPC Nickel
Given the investment horizon of 90 days Okta Inc is expected to generate 0.18 times more return on investment than SPC Nickel. However, Okta Inc is 5.61 times less risky than SPC Nickel. It trades about 0.16 of its potential returns per unit of risk. SPC Nickel Corp is currently generating about -0.38 per unit of risk. If you would invest 7,215 in Okta Inc on August 25, 2024 and sell it today you would earn a total of 442.00 from holding Okta Inc or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. SPC Nickel Corp
Performance |
| Timeline |
| Okta Inc |
| SPC Nickel Corp |
Okta and SPC Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and SPC Nickel
The main advantage of trading using opposite Okta and SPC Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, SPC Nickel 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 SPC Nickel will offset losses from the drop in SPC Nickel's long position.The idea behind Okta Inc and SPC Nickel Corp 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.| SPC Nickel vs. Norra Metals Corp | SPC Nickel vs. ZincX Resources Corp | SPC Nickel vs. Nuinsco Resources Limited | SPC Nickel vs. South Star Battery |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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