Correlation Between U BX and CyberArk Software

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

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

Diversification Opportunities for U BX and CyberArk Software

0.64

Correlation Coefficient

U BX  CyberArk Software

Poor diversification

The 3 months correlation between UBXG and CyberArk is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding U BX Technology Ltd and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and U BX 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 U BX Technology Ltd are associated (or correlated) with CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of U BX i.e., U BX and CyberArk Software go up and down completely randomly.

Pair Corralation between U BX and CyberArk Software

Given the investment horizon of 90 days U BX Technology Ltd is expected to generate 62.6 times more return on investment than CyberArk Software. However, U BX is 62.6 times more volatile than CyberArk Software. It trades about 0.11 of its potential returns per unit of risk. CyberArk Software is currently generating about 0.1 per unit of risk. If you would invest  68.00  in U BX Technology Ltd on September 21, 2024 and sell it today you would earn a total of  271.00  from holding U BX Technology Ltd or generate 398.53% return on investment over 90 days.

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

U BX Technology Ltd  vs.  CyberArk Software

U BX Technology

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U BX Technology Ltd are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, U BX reported solid returns over the last few months and may actually be approaching a breakup point.

CyberArk Software

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberArk Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental drivers, CyberArk Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with U BX and CyberArk Software

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

The idea behind U BX Technology Ltd and CyberArk Software 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.