Correlation Between Okta and Vivani Medical
Can any of the company-specific risk be diversified away by investing in both Okta and Vivani Medical 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 Vivani Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Vivani Medical, you can compare the effects of market volatilities on Okta and Vivani Medical 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 Vivani Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Vivani Medical.
Diversification Opportunities for Okta and Vivani Medical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Okta and Vivani is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Vivani Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivani Medical 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 Vivani Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivani Medical has no effect on the direction of Okta i.e., Okta and Vivani Medical go up and down completely randomly.
Pair Corralation between Okta and Vivani Medical
Given the investment horizon of 90 days Okta is expected to generate 1.21 times less return on investment than Vivani Medical. But when comparing it to its historical volatility, Okta Inc is 2.01 times less risky than Vivani Medical. It trades about 0.16 of its potential returns per unit of risk. Vivani Medical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Vivani Medical on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Vivani Medical or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. Vivani Medical
Performance |
| Timeline |
| Okta Inc |
| Vivani Medical |
Okta and Vivani Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Vivani Medical
The main advantage of trading using opposite Okta and Vivani Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Vivani Medical 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 Vivani Medical will offset losses from the drop in Vivani Medical's long position.The idea behind Okta Inc and Vivani Medical 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.| Vivani Medical vs. PepGen | Vivani Medical vs. Tyra Biosciences | Vivani Medical vs. Entrada Therapeutics | Vivani Medical vs. Pharvaris BV |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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