Correlation Between Okta and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both Okta and Zions Bancorporation 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 Zions Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Zions Bancorporation NA, you can compare the effects of market volatilities on Okta and Zions Bancorporation 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 Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Zions Bancorporation.
Diversification Opportunities for Okta and Zions Bancorporation
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Okta and Zions is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Zions Bancorp. NA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Okta i.e., Okta and Zions Bancorporation go up and down completely randomly.
Pair Corralation between Okta and Zions Bancorporation
Given the investment horizon of 90 days Okta Inc is expected to generate 4.58 times more return on investment than Zions Bancorporation. However, Okta is 4.58 times more volatile than Zions Bancorporation NA. It trades about 0.13 of its potential returns per unit of risk. Zions Bancorporation NA is currently generating about -0.25 per unit of risk. If you would invest 7,325 in Okta Inc on August 29, 2024 and sell it today you would earn a total of 358.00 from holding Okta Inc or generate 4.89% 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. Zions Bancorp. NA
Performance |
| Timeline |
| Okta Inc |
| Zions Bancorporation |
Okta and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Zions Bancorporation
The main advantage of trading using opposite Okta and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation's long position.The idea behind Okta Inc and Zions Bancorporation NA 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.| Zions Bancorporation vs. Zions Bancorporation National | Zions Bancorporation vs. Zions Bancorporation National | Zions Bancorporation vs. Brighthouse Financial | Zions Bancorporation vs. Hancock Whitney |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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