Correlation Between Okta and Perma Fix

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

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

Diversification Opportunities for Okta and Perma Fix

-0.29

Correlation Coefficient

Okta  Perma Fix

Very good diversification

The 3 months correlation between Okta and Perma is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Perma Fix Environmental Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental and Okta 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 Okta Inc are associated (or correlated) with Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of Okta i.e., Okta and Perma Fix go up and down completely randomly.

Pair Corralation between Okta and Perma Fix

Given the investment horizon of 90 days Okta Inc is expected to generate 0.34 times more return on investment than Perma Fix. However, Okta Inc is 2.94 times less risky than Perma Fix. It trades about 0.13 of its potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about -0.05 per unit of risk. If you would invest  7,325  in Okta Inc on August 27, 2024 and sell it today you would earn a total of  325.00  from holding Okta Inc or generate 4.44% return on investment over 90 days.

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

Okta Inc  vs.  Perma Fix Environmental Svcs

Okta Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okta Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Perma Fix Environmental

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perma Fix Environmental Svcs are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Perma Fix demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Okta and Perma Fix

The main advantage of trading using opposite Okta and Perma Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Perma Fix 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 Perma Fix will offset losses from the drop in Perma Fix's long position.

The idea behind Okta Inc and Perma Fix Environmental Svcs 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 Commodity Directory module to find actively traded commodities issued by global exchanges.