Correlation Between Confluent and Cellebrite

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

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

Diversification Opportunities for Confluent and Cellebrite

0.9

Correlation Coefficient

Confluent  Cellebrite

Almost no diversification

The 3 months correlation between Confluent and Cellebrite is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Confluent and Cellebrite DI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellebrite DI and Confluent 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 Confluent are associated (or correlated) with Cellebrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellebrite DI has no effect on the direction of Confluent i.e., Confluent and Cellebrite go up and down completely randomly.

Pair Corralation between Confluent and Cellebrite

Given the investment horizon of 90 days Confluent is expected to generate 1.49 times more return on investment than Cellebrite. However, Confluent is 1.49 times more volatile than Cellebrite DI. It trades about 0.23 of its potential returns per unit of risk. Cellebrite DI is currently generating about 0.13 per unit of risk. If you would invest  2,032  in Confluent on September 18, 2024 and sell it today you would earn a total of  1,115  from holding Confluent or generate 54.87% return on investment over 90 days.

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

Confluent  vs.  Cellebrite DI

Confluent

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Confluent are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Confluent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cellebrite DI

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cellebrite DI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Cellebrite unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Confluent and Cellebrite

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

The idea behind Confluent and Cellebrite DI 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.