Correlation Between Okta and Voya Strategic
Can any of the company-specific risk be diversified away by investing in both Okta and Voya Strategic 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 Voya Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Voya Strategic Income, you can compare the effects of market volatilities on Okta and Voya Strategic 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 Voya Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Voya Strategic.
Diversification Opportunities for Okta and Voya Strategic
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Voya is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Voya Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Strategic Income 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 Voya Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Strategic Income has no effect on the direction of Okta i.e., Okta and Voya Strategic go up and down completely randomly.
Pair Corralation between Okta and Voya Strategic
Given the investment horizon of 90 days Okta Inc is expected to generate 14.69 times more return on investment than Voya Strategic. However, Okta is 14.69 times more volatile than Voya Strategic Income. It trades about 0.03 of its potential returns per unit of risk. Voya Strategic Income is currently generating about 0.14 per unit of risk. If you would invest 6,194 in Okta Inc on August 26, 2024 and sell it today you would earn a total of 1,463 from holding Okta Inc or generate 23.62% 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. Voya Strategic Income
Performance |
| Timeline |
| Okta Inc |
| Voya Strategic Income |
Okta and Voya Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Voya Strategic
The main advantage of trading using opposite Okta and Voya Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Voya Strategic 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 Voya Strategic will offset losses from the drop in Voya Strategic's long position.The idea behind Okta Inc and Voya Strategic Income 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.| Voya Strategic vs. Voya Bond Index | Voya Strategic vs. Voya Bond Index | Voya Strategic vs. Voya Limited Maturity | Voya Strategic vs. Voya Limited Maturity |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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