Correlation Between Okta and Wesure Global
Can any of the company-specific risk be diversified away by investing in both Okta and Wesure Global 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 Wesure Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Wesure Global Tech, you can compare the effects of market volatilities on Okta and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Wesure Global.
Diversification Opportunities for Okta and Wesure Global
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Wesure is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Okta i.e., Okta and Wesure Global go up and down completely randomly.
Pair Corralation between Okta and Wesure Global
Given the investment horizon of 90 days Okta is expected to generate 3.67 times less return on investment than Wesure Global. But when comparing it to its historical volatility, Okta Inc is 1.52 times less risky than Wesure Global. It trades about 0.22 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 39,080 in Wesure Global Tech on September 1, 2024 and sell it today you would earn a total of 10,660 from holding Wesure Global Tech or generate 27.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Okta Inc vs. Wesure Global Tech
Performance |
| Timeline |
| Okta Inc |
| Wesure Global Tech |
Okta and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Wesure Global
The main advantage of trading using opposite Okta and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.The idea behind Okta Inc and Wesure Global Tech 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.| Wesure Global vs. Israel Land Development | Wesure Global vs. El Al Israel | Wesure Global vs. Lesico | Wesure Global vs. Mivtach Shamir |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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