Correlation Between Splunk and Okta
Can any of the company-specific risk be diversified away by investing in both Splunk and Okta 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 Splunk and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Splunk Inc and Okta Inc, you can compare the effects of market volatilities on Splunk and Okta 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 Splunk with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Splunk and Okta.
Diversification Opportunities for Splunk and Okta
Very good diversification
The 3 months correlation between Splunk and Okta is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Splunk Inc and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Splunk 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 Splunk Inc are associated (or correlated) with Okta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okta Inc has no effect on the direction of Splunk i.e., Splunk and Okta go up and down completely randomly.
Pair Corralation between Splunk and Okta
If you would invest 7,216 in Okta Inc on August 24, 2024 and sell it today you would earn a total of 328.00 from holding Okta Inc or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Splunk Inc vs. Okta Inc
Performance |
| Timeline |
| Splunk Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Okta Inc |
Splunk and Okta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Splunk and Okta
The main advantage of trading using opposite Splunk and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Splunk position performs unexpectedly, Okta 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 Okta will offset losses from the drop in Okta's long position.| Splunk vs. Crowdstrike Holdings | Splunk vs. Adobe Systems Incorporated | Splunk vs. Palantir Technologies | Splunk vs. Zscaler |
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..
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