Correlation Between Okta and CITIGROUP
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By analyzing existing cross correlation between Okta Inc and CITIGROUP INC 37, you can compare the effects of market volatilities on Okta and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and CITIGROUP.
Diversification Opportunities for Okta and CITIGROUP
Good diversification
The 3 months correlation between Okta and CITIGROUP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and CITIGROUP INC 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 37 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC 37 has no effect on the direction of Okta i.e., Okta and CITIGROUP go up and down completely randomly.
Pair Corralation between Okta and CITIGROUP
Given the investment horizon of 90 days Okta Inc is expected to generate 5.46 times more return on investment than CITIGROUP. However, Okta is 5.46 times more volatile than CITIGROUP INC 37. It trades about 0.22 of its potential returns per unit of risk. CITIGROUP INC 37 is currently generating about -0.18 per unit of risk. If you would invest 7,189 in Okta Inc on September 1, 2024 and sell it today you would earn a total of 567.00 from holding Okta Inc or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Okta Inc vs. CITIGROUP INC 37
Performance |
| Timeline |
| Okta Inc |
| CITIGROUP INC 37 |
Okta and CITIGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and CITIGROUP
The main advantage of trading using opposite Okta and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.The idea behind Okta Inc and CITIGROUP INC 37 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.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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