Correlation Between Appian Corp and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Appian Corp 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 Appian Corp and CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appian Corp and CyberArk Software, you can compare the effects of market volatilities on Appian Corp 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 Appian Corp with a short position of CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appian Corp and CyberArk Software.
Diversification Opportunities for Appian Corp and CyberArk Software
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Appian and CyberArk is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Appian Corp and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software and Appian 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 Appian Corp 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 Appian Corp i.e., Appian Corp and CyberArk Software go up and down completely randomly.
Pair Corralation between Appian Corp and CyberArk Software
Given the investment horizon of 90 days Appian Corp is expected to generate 3.58 times less return on investment than CyberArk Software. In addition to that, Appian Corp is 1.71 times more volatile than CyberArk Software. It trades about 0.02 of its total potential returns per unit of risk. CyberArk Software is currently generating about 0.11 per unit of volatility. If you would invest 22,822 in CyberArk Software on November 9, 2024 and sell it today you would earn a total of 15,459 from holding CyberArk Software or generate 67.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appian Corp vs. CyberArk Software
Performance |
| Timeline |
| Appian Corp |
| CyberArk Software |
Appian Corp and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appian Corp and CyberArk Software
The main advantage of trading using opposite Appian Corp and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appian Corp 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 Appian Corp 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.| CyberArk Software vs. F5 Networks | CyberArk Software vs. Qualys Inc | CyberArk Software vs. VeriSign | CyberArk Software vs. Amdocs |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |