Correlation Between Iron Mountain and Okta

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

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

Diversification Opportunities for Iron Mountain and Okta

-0.47

Correlation Coefficient

Iron Mountain  Okta

Very good diversification

The 3 months correlation between Iron and Okta is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Okta go up and down completely randomly.

Pair Corralation between Iron Mountain and Okta

Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to under-perform the Okta. But the stock apears to be less risky and, when comparing its historical volatility, Iron Mountain Incorporated is 1.72 times less risky than Okta. The stock trades about -0.26 of its potential returns per unit of risk. The Okta Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,589  in Okta Inc on October 22, 2024 and sell it today you would earn a total of  60.00  from holding Okta Inc or generate 2.32% return on investment over 90 days.

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

Iron Mountain Incorporated  vs.  Okta Inc

Iron Mountain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Mountain Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Okta Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Okta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iron Mountain and Okta

The main advantage of trading using opposite Iron Mountain and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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 Iron Mountain Incorporated 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.