Correlation Between Opendoor Technologies and Okta

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

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

Diversification Opportunities for Opendoor Technologies and Okta

0.35

Correlation Coefficient

Opendoor Technologies  Okta

Weak diversification

The 3 months correlation between Opendoor and Okta is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Opendoor Technologies and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Opendoor Technologies 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 Opendoor Technologies 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 Opendoor Technologies i.e., Opendoor Technologies and Okta go up and down completely randomly.

Pair Corralation between Opendoor Technologies and Okta

Given the investment horizon of 90 days Opendoor Technologies is expected to under-perform the Okta. In addition to that, Opendoor Technologies is 2.5 times more volatile than Okta Inc. It trades about -0.05 of its total potential returns per unit of risk. Okta Inc is currently generating about 0.07 per unit of volatility. If you would invest  7,502  in Okta Inc on September 19, 2024 and sell it today you would earn a total of  639.00  from holding Okta Inc or generate 8.52% return on investment over 90 days.

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

Opendoor Technologies  vs.  Okta Inc

Opendoor Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Opendoor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Okta Inc

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Okta may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Opendoor Technologies and Okta

The main advantage of trading using opposite Opendoor Technologies and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Opendoor Technologies 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 Opendoor Technologies 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.