Correlation Between GigaCloud Technology and Okta

Can any of the company-specific risk be diversified away by investing in both GigaCloud Technology 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 GigaCloud Technology and Okta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GigaCloud Technology Class and Okta Inc, you can compare the effects of market volatilities on GigaCloud Technology 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 GigaCloud Technology with a short position of Okta. Check out your portfolio center. Please also check ongoing floating volatility patterns of GigaCloud Technology and Okta.

Diversification Opportunities for GigaCloud Technology and Okta

-0.07

Correlation Coefficient

GigaCloud Technology  Okta

Good diversification

The 3 months correlation between GigaCloud and Okta is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GigaCloud Technology Class and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and GigaCloud Technology 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 GigaCloud Technology Class 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 GigaCloud Technology i.e., GigaCloud Technology and Okta go up and down completely randomly.

Pair Corralation between GigaCloud Technology and Okta

Considering the 90-day investment horizon GigaCloud Technology Class is expected to generate 3.71 times more return on investment than Okta. However, GigaCloud Technology is 3.71 times more volatile than Okta Inc. It trades about 0.07 of its potential returns per unit of risk. Okta Inc is currently generating about 0.03 per unit of risk. If you would invest  2,105  in GigaCloud Technology Class on September 3, 2024 and sell it today you would earn a total of  365.00  from holding GigaCloud Technology Class or generate 17.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GigaCloud Technology Class  vs.  Okta Inc

GigaCloud Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GigaCloud Technology Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, GigaCloud Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Okta Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Okta is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GigaCloud Technology and Okta

The main advantage of trading using opposite GigaCloud Technology and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GigaCloud Technology 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.

The idea behind GigaCloud Technology Class and Okta Inc 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.