Correlation Between Cerberus Cyber and Energy Vault

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

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

Diversification Opportunities for Cerberus Cyber and Energy Vault

0.61

Correlation Coefficient

Cerberus Cyber  Energy Vault

Poor diversification

The 3 months correlation between Cerberus and Energy is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cerberus Cyber Sentinel and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings and Cerberus Cyber 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 Cerberus Cyber Sentinel are associated (or correlated) with Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Cerberus Cyber i.e., Cerberus Cyber and Energy Vault go up and down completely randomly.

Pair Corralation between Cerberus Cyber and Energy Vault

Given the investment horizon of 90 days Cerberus Cyber Sentinel is expected to generate 0.81 times more return on investment than Energy Vault. However, Cerberus Cyber Sentinel is 1.23 times less risky than Energy Vault. It trades about 0.25 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about 0.18 per unit of risk. If you would invest  48.00  in Cerberus Cyber Sentinel on September 3, 2024 and sell it today you would earn a total of  90.00  from holding Cerberus Cyber Sentinel or generate 187.5% return on investment over 90 days.

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

Cerberus Cyber Sentinel  vs.  Energy Vault Holdings

Cerberus Cyber Sentinel

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Cerberus Cyber displayed solid returns over the last few months and may actually be approaching a breakup point.

Energy Vault Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Vault Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Energy Vault showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cerberus Cyber and Energy Vault

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

The idea behind Cerberus Cyber Sentinel and Energy Vault 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.