Correlation Between Akamai Technologies and Tenable Holdings

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

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

Diversification Opportunities for Akamai Technologies and Tenable Holdings

0.03

Correlation Coefficient

Akamai Technologies  Tenable Holdings

Significant diversification

The 3 months correlation between Akamai and Tenable is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies and Tenable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tenable Holdings and Akamai 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 Akamai Technologies are associated (or correlated) with Tenable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tenable Holdings has no effect on the direction of Akamai Technologies i.e., Akamai Technologies and Tenable Holdings go up and down completely randomly.

Pair Corralation between Akamai Technologies and Tenable Holdings

Given the investment horizon of 90 days Akamai Technologies is expected to under-perform the Tenable Holdings. In addition to that, Akamai Technologies is 1.32 times more volatile than Tenable Holdings. It trades about -0.03 of its total potential returns per unit of risk. Tenable Holdings is currently generating about 0.05 per unit of volatility. If you would invest  4,007  in Tenable Holdings on September 1, 2024 and sell it today you would earn a total of  191.00  from holding Tenable Holdings or generate 4.77% return on investment over 90 days.

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

Akamai Technologies  vs.  Tenable Holdings

Akamai Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akamai Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Akamai Technologies is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Tenable Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tenable Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tenable Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Akamai Technologies and Tenable Holdings

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

The idea behind Akamai Technologies and Tenable Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.