Correlation Between Okta and WH Group
Can any of the company-specific risk be diversified away by investing in both Okta and WH Group 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 WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and WH Group Limited, you can compare the effects of market volatilities on Okta and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and WH Group.
Diversification Opportunities for Okta and WH Group
Very good diversification
The 3 months correlation between Okta and WHGRF is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Okta i.e., Okta and WH Group go up and down completely randomly.
Pair Corralation between Okta and WH Group
Given the investment horizon of 90 days Okta is expected to generate 25.76 times less return on investment than WH Group. But when comparing it to its historical volatility, Okta Inc is 5.58 times less risky than WH Group. It trades about 0.02 of its potential returns per unit of risk. WH Group Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 27.00 in WH Group Limited on August 31, 2024 and sell it today you would earn a total of 52.00 from holding WH Group Limited or generate 192.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.01% |
| Values | Daily Returns |
Okta Inc vs. WH Group Limited
Performance |
| Timeline |
| Okta Inc |
| WH Group Limited |
Okta and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and WH Group
The main advantage of trading using opposite Okta and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.The idea behind Okta Inc and WH Group Limited 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.| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |