Correlation Between Okta and Timothy Plan
Can any of the company-specific risk be diversified away by investing in both Okta and Timothy Plan 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 Timothy Plan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Timothy Plan Market, you can compare the effects of market volatilities on Okta and Timothy Plan 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 Timothy Plan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Timothy Plan.
Diversification Opportunities for Okta and Timothy Plan
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Timothy is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Timothy Plan Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Plan Market 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 Timothy Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Plan Market has no effect on the direction of Okta i.e., Okta and Timothy Plan go up and down completely randomly.
Pair Corralation between Okta and Timothy Plan
Given the investment horizon of 90 days Okta Inc is expected to generate 6.44 times more return on investment than Timothy Plan. However, Okta is 6.44 times more volatile than Timothy Plan Market. It trades about 0.13 of its potential returns per unit of risk. Timothy Plan Market is currently generating about 0.1 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Timothy Plan Market
Performance |
| Timeline |
| Okta Inc |
| Timothy Plan Market |
Okta and Timothy Plan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Timothy Plan
The main advantage of trading using opposite Okta and Timothy Plan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Timothy Plan 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 Timothy Plan will offset losses from the drop in Timothy Plan's long position.The idea behind Okta Inc and Timothy Plan Market 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.| Timothy Plan vs. Timothy Plan Small | Timothy Plan vs. Timothy Plan LargeMid | Timothy Plan vs. Timothy Plan | Timothy Plan vs. Angel Oak Ultrashort |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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