Correlation Between Okta and TPG
Can any of the company-specific risk be diversified away by investing in both Okta and TPG 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 TPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and TPG Inc, you can compare the effects of market volatilities on Okta and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and TPG.
Diversification Opportunities for Okta and TPG
Very good diversification
The 3 months correlation between Okta and TPG is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Okta i.e., Okta and TPG go up and down completely randomly.
Pair Corralation between Okta and TPG
Given the investment horizon of 90 days Okta is expected to generate 2.36 times less return on investment than TPG. In addition to that, Okta is 1.38 times more volatile than TPG Inc. It trades about 0.03 of its total potential returns per unit of risk. TPG Inc is currently generating about 0.1 per unit of volatility. If you would invest 2,924 in TPG Inc on August 27, 2024 and sell it today you would earn a total of 4,142 from holding TPG Inc or generate 141.66% 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. TPG Inc
Performance |
| Timeline |
| Okta Inc |
| TPG Inc |
Okta and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and TPG
The main advantage of trading using opposite Okta and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG's long position.The idea behind Okta Inc and TPG Inc 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.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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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