Correlation Between Cellebrite and AvePoint

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

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

Diversification Opportunities for Cellebrite and AvePoint

0.68

Correlation Coefficient

Cellebrite  AvePoint

Poor diversification

The 3 months correlation between Cellebrite and AvePoint is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cellebrite DI Equity and AvePoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AvePoint and Cellebrite 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 Cellebrite DI Equity are associated (or correlated) with AvePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AvePoint has no effect on the direction of Cellebrite i.e., Cellebrite and AvePoint go up and down completely randomly.

Pair Corralation between Cellebrite and AvePoint

Assuming the 90 days horizon Cellebrite DI Equity is expected to under-perform the AvePoint. But the stock apears to be less risky and, when comparing its historical volatility, Cellebrite DI Equity is 1.2 times less risky than AvePoint. The stock trades about -0.21 of its potential returns per unit of risk. The AvePoint is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  249.00  in AvePoint on September 5, 2024 and sell it today you would earn a total of  436.00  from holding AvePoint or generate 175.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	14.52%
Values	Daily Returns

Cellebrite DI Equity  vs.  AvePoint

Cellebrite DI Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellebrite DI Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AvePoint

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AvePoint are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AvePoint showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cellebrite and AvePoint

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

The idea behind Cellebrite DI Equity and AvePoint 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.