Correlation Between Okta and Thai OPP
Can any of the company-specific risk be diversified away by investing in both Okta and Thai OPP 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 Thai OPP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Thai OPP Public, you can compare the effects of market volatilities on Okta and Thai OPP 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 Thai OPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Thai OPP.
Diversification Opportunities for Okta and Thai OPP
Significant diversification
The 3 months correlation between Okta and Thai is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Thai OPP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai OPP Public 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 Thai OPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai OPP Public has no effect on the direction of Okta i.e., Okta and Thai OPP go up and down completely randomly.
Pair Corralation between Okta and Thai OPP
Given the investment horizon of 90 days Okta Inc is expected to under-perform the Thai OPP. But the stock apears to be less risky and, when comparing its historical volatility, Okta Inc is 37.95 times less risky than Thai OPP. The stock trades about -0.04 of its potential returns per unit of risk. The Thai OPP Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,950 in Thai OPP Public on August 28, 2024 and sell it today you would lose (50.00) from holding Thai OPP Public or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Okta Inc vs. Thai OPP Public
Performance |
| Timeline |
| Okta Inc |
| Thai OPP Public |
Okta and Thai OPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Thai OPP
The main advantage of trading using opposite Okta and Thai OPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Thai OPP 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 Thai OPP will offset losses from the drop in Thai OPP's long position.The idea behind Okta Inc and Thai OPP Public 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.| Thai OPP vs. PTT OIL RETAIL | Thai OPP vs. SAF Special Steel | Thai OPP vs. Lotus Retail Growth | Thai OPP vs. CHUWIT FARM 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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