Correlation Between Flywire Corp and Cerberus Cyber

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

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

Diversification Opportunities for Flywire Corp and Cerberus Cyber

0.63

Correlation Coefficient

Flywire Corp  Cerberus Cyber

Poor diversification

The 3 months correlation between Flywire and Cerberus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Flywire Corp and Cerberus Cyber Sentinel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerberus Cyber Sentinel and Flywire Corp 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 Flywire Corp are associated (or correlated) with Cerberus Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerberus Cyber Sentinel has no effect on the direction of Flywire Corp i.e., Flywire Corp and Cerberus Cyber go up and down completely randomly.

Pair Corralation between Flywire Corp and Cerberus Cyber

Given the investment horizon of 90 days Flywire Corp is expected to generate 5.23 times less return on investment than Cerberus Cyber. But when comparing it to its historical volatility, Flywire Corp is 3.1 times less risky than Cerberus Cyber. It trades about 0.14 of its potential returns per unit of risk. Cerberus Cyber Sentinel is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  52.00  in Cerberus Cyber Sentinel on September 18, 2024 and sell it today you would earn a total of  108.00  from holding Cerberus Cyber Sentinel or generate 207.69% return on investment over 90 days.

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

Flywire Corp  vs.  Cerberus Cyber Sentinel

Flywire Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flywire Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Flywire Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Cerberus Cyber Sentinel

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cerberus Cyber Sentinel are ranked lower than 18 (%) 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.

Pair Trading with Flywire Corp and Cerberus Cyber

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

The idea behind Flywire Corp and Cerberus Cyber Sentinel 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.