Correlation Between Okta and Thule Group
Can any of the company-specific risk be diversified away by investing in both Okta and Thule Group 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 Thule Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Thule Group AB, you can compare the effects of market volatilities on Okta and Thule Group 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 Thule Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Thule Group.
Diversification Opportunities for Okta and Thule Group
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Thule is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Thule Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thule Group AB 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 Thule Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thule Group AB has no effect on the direction of Okta i.e., Okta and Thule Group go up and down completely randomly.
Pair Corralation between Okta and Thule Group
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Thule Group. In addition to that, Okta is 1.25 times more volatile than Thule Group AB. It trades about -0.01 of its total potential returns per unit of risk. Thule Group AB is currently generating about 0.07 per unit of volatility. If you would invest 26,600 in Thule Group AB on August 25, 2024 and sell it today you would earn a total of 8,480 from holding Thule Group AB or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Okta Inc vs. Thule Group AB
Performance |
| Timeline |
| Okta Inc |
| Thule Group AB |
Okta and Thule Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Thule Group
The main advantage of trading using opposite Okta and Thule Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Thule Group 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 Thule Group will offset losses from the drop in Thule Group's long position.The idea behind Okta Inc and Thule Group AB 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.| Thule Group vs. MIPS AB | Thule Group vs. NIBE Industrier AB | Thule Group vs. Dometic Group AB | Thule Group vs. Husqvarna AB |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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