Correlation Between Okta and Siam Steel
Can any of the company-specific risk be diversified away by investing in both Okta and Siam Steel 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 Siam Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Siam Steel Service, you can compare the effects of market volatilities on Okta and Siam Steel 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 Siam Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Siam Steel.
Diversification Opportunities for Okta and Siam Steel
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Okta and Siam is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Siam Steel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siam Steel Service 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 Siam Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siam Steel Service has no effect on the direction of Okta i.e., Okta and Siam Steel go up and down completely randomly.
Pair Corralation between Okta and Siam Steel
Given the investment horizon of 90 days Okta Inc is expected to generate 0.79 times more return on investment than Siam Steel. However, Okta Inc is 1.26 times less risky than Siam Steel. It trades about 0.12 of its potential returns per unit of risk. Siam Steel Service is currently generating about -0.03 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 | 95.45% |
| Values | Daily Returns |
Okta Inc vs. Siam Steel Service
Performance |
| Timeline |
| Okta Inc |
| Siam Steel Service |
Okta and Siam Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Siam Steel
The main advantage of trading using opposite Okta and Siam Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Siam Steel 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 Siam Steel will offset losses from the drop in Siam Steel's long position.The idea behind Okta Inc and Siam Steel Service 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.| Siam Steel vs. PTT Public | Siam Steel vs. PTT Exploration and | Siam Steel vs. CP ALL Public | Siam Steel vs. Kasikornbank Public |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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