Correlation Between PURETECH HEALTH and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both PURETECH HEALTH 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 PURETECH HEALTH and CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PURETECH HEALTH PLC and CyberArk Software, you can compare the effects of market volatilities on PURETECH HEALTH 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 PURETECH HEALTH with a short position of CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURETECH HEALTH and CyberArk Software.
Diversification Opportunities for PURETECH HEALTH and CyberArk Software
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PURETECH and CyberArk is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding PURETECH HEALTH PLC and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and PURETECH HEALTH 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 PURETECH HEALTH PLC 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 PURETECH HEALTH i.e., PURETECH HEALTH and CyberArk Software go up and down completely randomly.
Pair Corralation between PURETECH HEALTH and CyberArk Software
Assuming the 90 days horizon PURETECH HEALTH PLC is expected to under-perform the CyberArk Software. In addition to that, PURETECH HEALTH is 1.32 times more volatile than CyberArk Software. It trades about -0.23 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.18 per unit of volatility. If you would invest 30,860 in CyberArk Software on October 12, 2024 and sell it today you would earn a total of 2,110 from holding CyberArk Software or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PURETECH HEALTH PLC vs. CyberArk Software
Performance |
| Timeline |
| PURETECH HEALTH PLC |
| CyberArk Software |
PURETECH HEALTH and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PURETECH HEALTH and CyberArk Software
The main advantage of trading using opposite PURETECH HEALTH and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURETECH HEALTH 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.| PURETECH HEALTH vs. GREENX METALS LTD | PURETECH HEALTH vs. AOYAMA TRADING | PURETECH HEALTH vs. PennyMac Mortgage Investment | PURETECH HEALTH vs. CHRYSALIS INVESTMENTS LTD |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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