Correlation Between Appian Corp and Okta

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

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

Diversification Opportunities for Appian Corp and Okta

0.59

Correlation Coefficient

Appian Corp  Okta

Very weak diversification

The 3 months correlation between Appian and Okta is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp and Okta Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okta Inc and Appian Corp 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 Appian Corp 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 Appian Corp i.e., Appian Corp and Okta go up and down completely randomly.

Pair Corralation between Appian Corp and Okta

Given the investment horizon of 90 days Appian Corp is expected to under-perform the Okta. In addition to that, Appian Corp is 2.89 times more volatile than Okta Inc. It trades about -0.16 of its total potential returns per unit of risk. Okta Inc is currently generating about -0.15 per unit of volatility. If you would invest  10,150  in Okta Inc on February 5, 2024 and sell it today you would lose (495.00) from holding Okta Inc or give up 4.88% of portfolio value over 90 days.

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

Appian Corp  vs.  Okta Inc

Appian Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Appian Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Appian Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Okta Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Okta Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Okta sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Appian Corp and Okta

The main advantage of trading using opposite Appian Corp and Okta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp 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 Appian Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.