Correlation Between Squarespace and Okta
Can any of the company-specific risk be diversified away by investing in both Squarespace 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 Squarespace and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Squarespace and Okta Inc, you can compare the effects of market volatilities on Squarespace 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 Squarespace with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Squarespace and Okta.
Diversification Opportunities for Squarespace and Okta
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Squarespace and Okta is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Squarespace and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Squarespace 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 Squarespace 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 Squarespace i.e., Squarespace and Okta go up and down completely randomly.
Pair Corralation between Squarespace and Okta
Given the investment horizon of 90 days Squarespace is expected to generate 0.62 times more return on investment than Okta. However, Squarespace is 1.63 times less risky than Okta. It trades about 0.13 of its potential returns per unit of risk. Okta Inc is currently generating about 0.03 per unit of risk. If you would invest 2,920 in Squarespace on September 14, 2024 and sell it today you would earn a total of 1,737 from holding Squarespace or generate 59.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.13% |
| Values | Daily Returns |
Squarespace vs. Okta Inc
Performance |
| Timeline |
| Squarespace |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Okta Inc |
Squarespace and Okta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Squarespace and Okta
The main advantage of trading using opposite Squarespace and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Squarespace 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.| Squarespace vs. Wex Inc | Squarespace vs. CSG Systems International | Squarespace vs. VeriSign | Squarespace vs. Evertec |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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