Correlation Between CyberArk Software and VARIOUS EATERIES

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

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

Diversification Opportunities for CyberArk Software and VARIOUS EATERIES

-0.32

Correlation Coefficient

CyberArk Software  VARIOUS EATERIES

Very good diversification

The 3 months correlation between CyberArk and VARIOUS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CyberArk Software and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES and CyberArk Software 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 CyberArk Software are associated (or correlated) with VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of CyberArk Software i.e., CyberArk Software and VARIOUS EATERIES go up and down completely randomly.

Pair Corralation between CyberArk Software and VARIOUS EATERIES

Assuming the 90 days trading horizon CyberArk Software is expected to generate 1.74 times more return on investment than VARIOUS EATERIES. However, CyberArk Software is 1.74 times more volatile than VARIOUS EATERIES LS. It trades about 0.11 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.1 per unit of risk. If you would invest  25,470  in CyberArk Software on September 24, 2024 and sell it today you would earn a total of  4,510  from holding CyberArk Software or generate 17.71% return on investment over 90 days.

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

CyberArk Software  vs.  VARIOUS EATERIES LS

CyberArk Software

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CyberArk Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

VARIOUS EATERIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VARIOUS EATERIES LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CyberArk Software and VARIOUS EATERIES

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

The idea behind CyberArk Software and VARIOUS EATERIES LS 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.