Correlation Between Okta and Mainstay Cbre
Can any of the company-specific risk be diversified away by investing in both Okta and Mainstay Cbre 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 Mainstay Cbre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Mainstay Cbre Global, you can compare the effects of market volatilities on Okta and Mainstay Cbre 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 Mainstay Cbre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Mainstay Cbre.
Diversification Opportunities for Okta and Mainstay Cbre
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Mainstay is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Mainstay Cbre Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cbre Global 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 Mainstay Cbre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cbre Global has no effect on the direction of Okta i.e., Okta and Mainstay Cbre go up and down completely randomly.
Pair Corralation between Okta and Mainstay Cbre
Given the investment horizon of 90 days Okta Inc is expected to generate 3.72 times more return on investment than Mainstay Cbre. However, Okta is 3.72 times more volatile than Mainstay Cbre Global. It trades about 0.03 of its potential returns per unit of risk. Mainstay Cbre Global is currently generating about 0.04 per unit of risk. If you would invest 6,442 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 1,200 from holding Okta Inc or generate 18.63% 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. Mainstay Cbre Global
Performance |
| Timeline |
| Okta Inc |
| Mainstay Cbre Global |
Okta and Mainstay Cbre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Mainstay Cbre
The main advantage of trading using opposite Okta and Mainstay Cbre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Mainstay Cbre 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 Mainstay Cbre will offset losses from the drop in Mainstay Cbre's long position.The idea behind Okta Inc and Mainstay Cbre Global 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.| Mainstay Cbre vs. Eic Value Fund | Mainstay Cbre vs. Barings Active Short | Mainstay Cbre vs. Nasdaq 100 Index Fund | Mainstay Cbre vs. Ab Value Fund |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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