Correlation Between Okta and Walkme
Can any of the company-specific risk be diversified away by investing in both Okta and Walkme 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 Walkme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Walkme, you can compare the effects of market volatilities on Okta and Walkme 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 Walkme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Walkme.
Diversification Opportunities for Okta and Walkme
Very good diversification
The 3 months correlation between Okta and Walkme is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Walkme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walkme 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 Walkme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walkme has no effect on the direction of Okta i.e., Okta and Walkme go up and down completely randomly.
Pair Corralation between Okta and Walkme
Given the investment horizon of 90 days Okta is expected to generate 2.92 times less return on investment than Walkme. But when comparing it to its historical volatility, Okta Inc is 1.21 times less risky than Walkme. It trades about 0.02 of its potential returns per unit of risk. Walkme is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 940.00 in Walkme on August 31, 2024 and sell it today you would earn a total of 455.00 from holding Walkme or generate 48.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.29% |
| Values | Daily Returns |
Okta Inc vs. Walkme
Performance |
| Timeline |
| Okta Inc |
| Walkme |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Okta and Walkme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Walkme
The main advantage of trading using opposite Okta and Walkme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Walkme 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 Walkme will offset losses from the drop in Walkme's long position.The idea behind Okta Inc and Walkme 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.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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