Correlation Between Okta and Vishay Precision
Can any of the company-specific risk be diversified away by investing in both Okta and Vishay Precision 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 Vishay Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Vishay Precision Group, you can compare the effects of market volatilities on Okta and Vishay Precision 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 Vishay Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Vishay Precision.
Diversification Opportunities for Okta and Vishay Precision
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Okta and Vishay is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Vishay Precision Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Precision 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 Vishay Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Precision has no effect on the direction of Okta i.e., Okta and Vishay Precision go up and down completely randomly.
Pair Corralation between Okta and Vishay Precision
Given the investment horizon of 90 days Okta Inc is expected to generate 0.84 times more return on investment than Vishay Precision. However, Okta Inc is 1.19 times less risky than Vishay Precision. It trades about 0.05 of its potential returns per unit of risk. Vishay Precision Group is currently generating about -0.13 per unit of risk. If you would invest 7,434 in Okta Inc on August 30, 2024 and sell it today you would earn a total of 249.00 from holding Okta Inc or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Okta Inc vs. Vishay Precision Group
Performance |
| Timeline |
| Okta Inc |
| Vishay Precision |
Okta and Vishay Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Vishay Precision
The main advantage of trading using opposite Okta and Vishay Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Vishay Precision 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 Vishay Precision will offset losses from the drop in Vishay Precision's long position.The idea behind Okta Inc and Vishay Precision Group 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.| Vishay Precision vs. Coherent | Vishay Precision vs. ESCO Technologies | Vishay Precision vs. Mesa Laboratories | Vishay Precision vs. Sensata Technologies Holding |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |