Correlation Between Okta and Thai Rubber
Can any of the company-specific risk be diversified away by investing in both Okta and Thai Rubber 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 Rubber 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 Rubber Latex, you can compare the effects of market volatilities on Okta and Thai Rubber 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 Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Thai Rubber.
Diversification Opportunities for Okta and Thai Rubber
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Okta and Thai is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Thai Rubber Latex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Rubber Latex 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 Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Rubber Latex has no effect on the direction of Okta i.e., Okta and Thai Rubber go up and down completely randomly.
Pair Corralation between Okta and Thai Rubber
Given the investment horizon of 90 days Okta Inc is expected to generate 0.76 times more return on investment than Thai Rubber. However, Okta Inc is 1.31 times less risky than Thai Rubber. It trades about 0.13 of its potential returns per unit of risk. Thai Rubber Latex is currently generating about -0.29 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Okta Inc vs. Thai Rubber Latex
Performance |
| Timeline |
| Okta Inc |
| Thai Rubber Latex |
Okta and Thai Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Thai Rubber
The main advantage of trading using opposite Okta and Thai Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Thai Rubber 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 Rubber will offset losses from the drop in Thai Rubber's long position.The idea behind Okta Inc and Thai Rubber Latex 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 Rubber vs. Thoresen Thai Agencies | Thai Rubber vs. Sri Trang Agro Industry | Thai Rubber vs. TPI Polene Public | Thai Rubber vs. Ratchthani Leasing 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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