Correlation Between Okta and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Okta and ProShares Ultra 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 ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Okta and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and ProShares Ultra.
Diversification Opportunities for Okta and ProShares Ultra
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Okta and ProShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of Okta i.e., Okta and ProShares Ultra go up and down completely randomly.
Pair Corralation between Okta and ProShares Ultra
Given the investment horizon of 90 days Okta Inc is expected to under-perform the ProShares Ultra. But the stock apears to be less risky and, when comparing its historical volatility, Okta Inc is 3.14 times less risky than ProShares Ultra. The stock trades about -0.3 of its potential returns per unit of risk. The ProShares Ultra Bloomberg is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,486 in ProShares Ultra Bloomberg on January 19, 2024 and sell it today you would lose (150.00) from holding ProShares Ultra Bloomberg or give up 10.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okta Inc vs. ProShares Ultra Bloomberg
Performance |
| Timeline |
| Okta Inc |
| ProShares Ultra Bloomberg |
Okta and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and ProShares Ultra
The main advantage of trading using opposite Okta and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.The idea behind Okta Inc and ProShares Ultra Bloomberg 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.| ProShares Ultra vs. Drum Income Plus | ProShares Ultra vs. EA Series Trust | ProShares Ultra vs. Global X MLP | ProShares Ultra vs. ETRACS Quarterly Pay |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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